On Thursday, Citi maintained its Neutral rating and $370.00 price target on Deere (NYSE:DE) stock, following its fiscal third-quarter 2024 earnings release.
Deere reported an adjusted earnings per share (EPS) of $6.29, surpassing both Citi's projection of $5.45 and the FactSet consensus estimate of $5.68. The earnings beat was attributed to stronger-than-expected sales and margins in the agriculture and turf segment.
Deere has kept its fiscal year 2024 net income guidance steady at approximately $7 billion. While the company's sales and margin forecasts for the agriculture and turf segment remain unchanged, it has revised its construction and forestry (C&F) sales and margin outlook downward by 500 basis points (bps) and 200 bps, respectively.
Despite this adjustment, Deere's robust margin performance and an approximate 50-basis-point increase in the anticipated fiscal year 2024 agriculture and turf price realization were highlighted amid a challenging agricultural market.
The company's strong fiscal third-quarter performance suggests that Deere's stock might experience an uptick, even though fiscal fourth-quarter 2024 EPS estimates are likely to be adjusted downward.
Deere's updated full-year guidance implies a fiscal fourth-quarter EPS of around $4.20, which falls below Citi's estimate of $4.29 and the FactSet consensus of $4.58.
Investors are expected to react to Deere's fiscal third-quarter results, which could lead to a movement in the company's share price. The updated forecasts and earnings results are key factors for market participants to consider as they assess the company's performance and outlook.
InvestingPro Insights
Deere's recent fiscal third-quarter earnings beat and steady net income guidance for the fiscal year 2024 highlight its resilience in a fluctuating agricultural market. With a market capitalization of $96.8 billion and a strong operating income margin of 24.6%, Deere demonstrates a robust financial position. The company's P/E ratio stands at a moderate 10.51, suggesting that the stock is trading at a reasonable earnings multiple relative to near-term earnings growth, which is an encouraging sign for value-oriented investors.
InvestingPro Tips reveal that Deere has been consistently rewarding shareholders, with a notable dividend growth of 17.6% over the last twelve months as of Q2 2024. Additionally, the company has maintained dividend payments for an impressive 54 consecutive years. This consistent dividend record, combined with a dividend yield of 1.67%, may appeal to income-focused investors. For those considering a deeper analysis, there are 16 additional InvestingPro Tips available that could provide further insights into Deere's investment potential.
Despite a slight sales decline of 1.77% over the last twelve months as of Q2 2024, Deere's gross profit margin remains strong at 34.8%. The company's share price is trading near its 52-week low, which could represent a buying opportunity for long-term investors, especially considering that analysts predict the company will remain profitable this year. As market participants digest Deere's latest earnings and updated guidance, these InvestingPro data points and tips offer a nuanced perspective on the company's financial health and future outlook.
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