BMO Capital lifted Deere & Company’s price target to $235 (23% upside potential) from $150 and reiterated a Buy rating ahead of the farm and construction equipment maker’s 3Q results on Aug. 21.
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BMO Capital analyst Joel Tiss said on Monday that demand across Deere’s (DE) end markets are expected to be “better than feared” despite the headwinds, which includes trade disputes and low grain prices. Tiss noted that the company’s ability to improve margins has helped push its stock price up over 10% so far this year.
In 2Q, Deere reported better-than-expected results despite business disruptions caused by the COVID-19 pandemic. The company’s 2Q revenues of $9.3 billion topped Street estimates of $7.7 billion. Its EPS of $2.11 per share also beat the consensus estimate of $1.62 a share. However, Deere had warned that full-year sales will decline as the pandemic weighs on demand for industrial and agricultural equipment.
Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 9 Buys, 4 Holds and 1 Sell. The average price target of $182.69 implies downside potential of about 4.4%. (See DE stock analysis on TipRanks).
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