Deere & Company (NYSE:DE) is scheduled to report its fourth-quarter Fiscal 2022 results on November 23, before the market opens. Known by its brand name, John Deere, the company manufactures and distributes various equipment that is used in agriculture, construction, forestry, and turf care.
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The Street expects Deere to post a diluted profit of $7.12 per share, almost double the prior-year quarter figure of $4.12 per share, and 15.6% higher than the prior quarter number.
Similarly, revenues are pegged at $13.39 billion, 18.1% higher than the Q4FY21 number. However, the number is marginally lower than the prior quarter’s figure of $14.10 billion.
Factors Impacting Deere’s Quarterly Performance
Deere’s fourth-quarter results could be impacted by supply chain constraints, persistent inflationary pressures, and unfavorable foreign exchange rates. The company failed to meet earnings expectations in Q3FY22 and lowered FY22 projections because of the above-mentioned reasons. On the other hand, solid production rates helped to boost Deere’s top-line numbers. Meanwhile, Deere expects earnings to be in the $7.0-7.2 billion range for the full year of Fiscal 2022.
Having said that, Deere will release an outlook for the Fiscal year 2023, which is expected to be a record high. During Q3 results, Deere stated, “Looking ahead, we believe favorable conditions will continue into 2023 based on the strong response we have experienced to early-order programs.” Accordingly, the company is undertaking strategic steps with its factories and suppliers to meet the higher demand expectations for the next year.
Is Deere Stock a Good Buy?
Analysts are split on Deere’s stock trajectory, but they expect solid forecasts and performance into 2023 and 2024 owing to pent-up demand during the current year.
Cowen & Co. analyst Matt Elkott reiterated a Hold rating on Deere stock ahead of its Q4 print. The five-star analyst has a price target of $342, which implies 16.9% downside potential to current levels.
On the contrary, DA Davidson analyst Michael Shlisky reiterated a Buy rating on DE stock with a price target of $445, which implies an impressive 8.1% upside potential from current levels.
On TipRanks, Deere & Co. stock has a Moderate Buy consensus rating. This is based on ten Buys versus five Holds during the past three months. Also, the average Deere & Co. price forecast of $412.07 implies that shares are almost fully valued at current levels.
At the same time, year to date, DE stock has gained 18.7%. Deere also pays a regular quarterly common dividend of $1.13 per share, reflecting a current yield of 1.05%.
Ending Thoughts
Deere may be able to beat expectations in the fourth quarter if production rates and higher pricing support the manufacturer. Remarkably, Deere & Co. scores a “Perfect 10” on TipRanks’ Smart Score rating system, implying that the stock is set to outpace market expectations. Also, Bloggers and News Sentiment are bullish on DE, while both retail investors and hedge funds are increasing their exposure to the stock. However, Deere is facing macroeconomic headwinds, which may impact its performance to a certain extent.
