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.
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 billion
Per-share earnings also climbed from $4.12 to $7.44
Sales went up 37.2% year-over-year to $15.54 billion
Consensus 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.
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