2023-11-22 09:14:11 ET
Deere & Company (NYSE: DE) is down nearly 7.0% in premarket trading even though it reported market-beating results for its fiscal fourth quarter.
Why is Deere stock down today?
The stock is being punished primarily because the management issued guidance that did not quite live up to expectations. Deere now forecasts up to $8.25 billion of net income in its fiscal 2024.
Analysts, in comparison, were at $9.3 billion instead which already meant a 9.0% year-on-year decline on fears of lower commodity prices and peak farm incomes. Still, Jeff Kilburg said in a recent interview with CNBC :
I do want to own Deere here. I think it’s a buying opportunity. It is offered at a discount. This industrial name has outperformed the S&P 500 on any metric you look.
Jim Lebenthal also sees Deere stock at 11 times earnings as a gift even though the company saw its production and precision revenue slip 6.0% year-on-year in the fourth quarter.
Watch here: https://www.youtube.com/embed/_U3zC3J9JLU?feature=oembedDeere Q4 financial highlights
- Earned $2.37 billion versus the year-ago $2.25 billion
- Per-share earnings also climbed from $7.44 to $8.26
- Sales declined 4.0% year-over-year to $13.8 billion
- Consensus was $7.46 a share on $13.6 billion in sales
Deere noted a 13% hit to revenue from its small agriculture and turf segment in Q4, as per the earnings press release . According to Citi analyst Timothy Thein:
Most dealers expect 2024 to be a down year. There is more caution in the outlook, but it resembles more of a soft landing at this point.
The fact that Deere & Company tends to be conservative in terms of its future outlook, though, still made him reiterate his “buy” rating on the industrial stock today with upside to $475 – up a whopping 32% from here.
John Deere 9620RX pic.twitter.com/0X92gI2gN5
— Matt Garth (@MattGarthMidway) November 22, 2023
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