Deere & Co. (DE) continues to pressure its 52-week high at $62.08 on rising estimates and a bullish next-year growth projection.
Company Description
Deere & Co. provides products and services for agriculture and forestry worldwide. The company was founded in 1837 and has a market cap of $25 billion.
First-Quarter Results
Shares of DE jumped higher on Feb 17 after the company reported better than expected Q1 results. Revenue was down 6% from last year to $4.86 billion, but earnings came in ahead of expectations at 57 cents per share, 200% better than the Zacks Consensus Estimate. The company has surprised in each of the last four quarters by an average of 25 cents, or 159%.
The company noted that its results were helped by “lower materials costs, improved price realization and favorable effects from foreign currency exchanges.” Deere has also boosted its results with strong working capital management, with inventory and receivables down $1.44 billion from last year to $5.88 billion.
Estimates Rising
Analysts have been raising estimates for the last few months, with the current year up 67 cents to $3.19. The next-year estimate is up 51 cents to $4.09, a bullish 28% growth projection.
Shares of DE still look reasonably priced, particularly when factoring in the next-year growth estimate, trading with a forward P/E of 18X, a slight premium to the overall market.
The Chart
Shares of DE are currently pressuring the 52-week high just above $62 after rebounding from the long-term trend line that has been in play for most of the last 9 months. Look for support at the trend on a pull back, take a look below.
Michael Vodicka is the Momentum Stock Strategist for Zacks.com. He is also the Editor in charge of the market-beating Zacks Surprise Trader Service. Zacks Investment Research
