Shares of Deere & Co. rose nearly 3% on Monday after Merrill Lynch upgraded the farm and construction equipment manufacturer’s stock to Buy from Hold.
Merrill Lynch analyst Ross Gilardi’s rating change comes after Deere’s (DE) upbeat EPS forecast for the current quarter and raised earnings outlook for fiscal 2020. In a note to investors, Gilardi wrote that the company is “finally delivering the type of margin performance in Ag & Turf that had been elusive.” The analyst reiterated a price target of $234 (13.9% upside potential) on the stock.
On Aug. 21, Deere reported 3Q revenues of $8.93 billion, beating Street estimates of $6.7 billion. The company’s earnings of $2.57 surpassed analysts’ expectations of $1.26. Its net income forecast for fiscal 2020 was raised to $2.25 billion from the previous guidance range of $1.6-$2 billion. (See DE stock analysis on TipRanks).
Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 12 Buys, 4 Holds, and 1 Sell. With shares up 18.6% year-to-date, the average price target of $211.94 implies upside potential of about 3.2%.