DE - Why Deere Is Off and Running Again
Up by 81% over the past 12 months and 34% year to date, Deere & Company (NYSE: DE) stock has escaped the doldrums it has long been mired in. The company once again has growing revenue, earnings, and stock value. The fiscal third-quarter report it recently delivered shows circumstances are favorable for it right now, and it's taking positive actions to profit from the opportunity -- though a few potential stumbling blocks remain.
The economic results of the COVID-19 pandemic set several trends in motion beneficial to Deere and other equipment manufacturers . Rising commodity prices are infusing more money into the agricultural sector. That is enabling farmers and agribusinesses to buy new equipment to meet rising demand or replace older, worn-out gear.
A Goldman Sachs rating upgrade for Georgia-based agricultural machinery maker Agco (NYSE: AGCO) included a research note saying its decision was "driven by our positive outlook on a multi-year recovery in long-cycle ag [agricultural] equipment demand." The note also said "declines in used equipment inventories over the past seven years (60+% decline) and rising used equipment values (+26% yoy) signal a strong multi-year need for" new equipment.
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Why Deere Is Off and Running Again