DE - Machinery rally has plenty of gas left in the tank - Vertical Research

"We believe the current machinery up-cycle is only in the early innings," Vertical Research says in a new note. "Our base scenario assumes at least 2-3 years of solid growth as we move from recovery mode to a new expansion. We believe the Machinery group is structurally better positioned than any time in their history."Analysts including Brett Linzey and Denys Klimyentyev point to higher margin highs, exceptional income preservation during a lethargic and choppy 2010-2019 period and nimbleness navigating the 2020 pandemic as trends that accentuate this point.Aftermarket and services have also become a larger portion of revenue, distribution and dealer channels have "become more rational and disciplined," and earnings streams are more diverse. Example: After only 2-3 years of ownership, first time buyers are now seeking to flip equipment for disruptive technologies and software, producing a higher quality earnings stream that will catalyze the upturn.Top Machinery Picks: Deere ([[DE]]

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Machinery rally has plenty of gas left in the tank - Vertical Research