Melius Research’s Rob Wertheimer shares his outlook on the Deere stock.
Shares of the industrial equipment manufacturer are up nearly 7.0% today.
Deere & Company (NYSE: DE) is trading significantly up this morning after reporting its fourth-quarter sales that topped Street expectations by more than $2.0 billion.
Is Deere stock a ‘buy’ right now?
Shares are also up because the industrial equipment manufacturer issued positive guidance for the future.
Are you looking for fast-news, hot-tips and market analysis?
Sign-up for the Invezz newsletter, today.
Deere forecasts its net income to fall between $8.0 billion and $8.50 billion in fiscal 2023. In comparison, analysts were at $7.9 billion only. On CNBC’s “Worldwide Exchange”, Rob Wertheimer of Melius Research said:
The story this quarter for industrials has been pretty good demand; farmers are buying as much equipment as they can. The trick has been supply chain management – so trying to get margins back into shape.
On that front, Deere said all of its business segments improved operating margins this quarter.
Wertheimer sees upside in the Moline-headquartered firm to $463 – that may warrant buying Deere stock here as it represents more than a 10% upside on its previous close.
When you look at the flood of money coming into the U.S. as reshoring happens, there’s a lot of beneficiaries in industrial world. We think there’s a lot of room in industrial space as consumer economy cools off and spending come back.
Key takeaways from Deere’s Q4 earnings report
Earned $2.25 billion versus the year-ago $1.28 billionPer-share earnings also climbed from $4.12 to $7.44Sales went up 37.2% year-over-year to $15.54 billionConsensus was $7.11 a share on $13.44 billion in sales
Deere CEO John May attributed the Q4 strength and upbeat guidance partly to higher crop prices. In the earnings press release, he said:
Deere is looking forward to another strong year in 2023 based on positive farm fundamentals and fleet dynamics as well as an increased investment in infrastructure.
Copy expert traders easily with eToro. Invest in stocks like Tesla & Apple. Instantly trade ETFs like FTSE 100 & S&P 500. Sign-up in minutes.
68% of retail CFD accounts lose money
Get demo account
Stocks & Shares