Deere & Co. (NYSE:DE), a manufacturer of agricultural machinery and heavy equipment, slid in pre-market trading after a downbeat FY24 outlook. The company expects net income in the range of $7.5 billion to $7.75 billion, down from $10.2 billion in FY23 and below the consensus estimates of $8.03 billion.
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During FY24, the company projects that the large agriculture industry will decline by 10% to 15% in the U.S. and Canada, while the construction and equipment industry is expected to fall between 0% and 5%.
For Deere’s different business segments, its Production and Precision Agricultural sales are expected to decline by about 20%. In addition, Small Agricultural and Turf sales are projected to fall by 10% to 15%, while Construction and Forestry sales are likely to drop by 5% to 10%.
In its first quarter of Fiscal Year 2024, the company’s global net sales declined by 8% year-over-year to $10.49 billion. Still, this was above consensus estimates of $10.3 billion. Deere reported earnings of $6.23 per share in Q1 compared to $6.55 per share in the same period last year. This also surpassed Street estimates of $5.26 per share.
Is Deere Stock a Buy or Sell?
Analysts remain cautiously optimistic about DE stock with a Moderate Buy consensus rating based on 11 Buys and seven Holds. Over the past year, DE stock has declined by more than 3%, and the average DE price target of $430.29 implies an upside potential of 11.8% at current levels.
