J.P. Morgan analyst Tami Zakaria has maintained their neutral stance on DE stock, giving a Hold rating on May 8.
Tami Zakaria has given his Hold rating due to a combination of factors concerning Deere’s financial performance and future projections. Deere’s second quarter showed a sales beat, but this was offset by a downward revision in the full-year 2024 guidance, which indicated net income and EPS projections significantly lower than market consensus. The updated guidance suggests a steeper year-over-year decline in equipment sales and a lower operating margin than anticipated. This revision reflects a challenging agricultural equipment market trajectory, which could lead investors to reassess the company’s earnings potential in the current cycle.
Furthermore, Zakaria’s analysis points towards a potential further decline in equipment sales, with an anticipated decrease in earnings per share for the following year that may fall below what optimists have previously estimated. The new projections, along with a fair value calculation, suggest that Deere’s stock may not perform as well as expected, prompting the Hold rating. The report also highlights key questions that could impact the company’s financials, such as production volumes, inventory levels, and margins, indicating a cautious outlook for Deere’s near-term performance.
According to TipRanks, Zakaria is a 5-star analyst with an average return of 20.9% and a 68.97% success rate. Zakaria covers the Industrials sector, focusing on stocks such as Deere, Paccar, and Atmus Filtration Technologies, Inc..
In another report released on May 8, Deutsche Numis also maintained a Hold rating on the stock with a $401.00 price target.
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Deere (DE) Company Description:
Founded in 1837, Illinois-based Deere & Co. manufactures and distributes various equipment that is used in agriculture, construction, forestry, and turf care. The company operates through three business segments: Agriculture and Turf, Construction and Forestry, and Financial Services.
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