Deere Reaches Tentative Agreement with UAW; Shares Rise 2.1%

Illinois-based Deere & Co. (DE) has reached a tentative agreement with the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) on a new six-year labor agreement involving around 10,100 maintenance and production employees at 12 facilities in Kansas, Illinois and Iowa.

The company has also reached a tentative agreement with the UAW on another new six-year labor agreement covering approximately 100 production and maintenance employees at Deere’s parts plants in Atlanta and Denver.

Deere is engaged in the production of diesel engines, forestry machinery, heavy equipment, agricultural machinery, drivetrains used in heavy equipment and lawn care equipment. Shares of the company closed 2.1% higher at $342.20 on Friday. (See Deere stock chart on TipRanks)

The Vice-President of Labor Relations at Deere, Brad Morris, said, “Through this agreement, John Deere reinforces our longstanding commitment to provide employees the opportunities to earn the best wages and most comprehensive benefits in the agriculture and construction industries.”

Before a ratification vote, Deere’s maintenance and production employees will be able to review the terms of the tentative agreement. In the meantime, the company’s operations will continue as scheduled.

Two months ago, Robert W. Baird analyst Mircea Dobre initiated coverage on the stock with a Buy rating and a price target of $425 (24.2% upside potential).

After the release of Deere’s financial results for the fiscal third quarter ended August 1, the analyst said that the company reported “a solid beat.”

Overall, the stock has a Moderate Buy consensus rating based on 3 Buys and 1 Hold. The average Deere price target of $407.20 implies 19% upside potential. Shares have gained 50.8% over the past year.

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