Deere (DE): Concerns Overblown, Deutsche Bank Reiterates Buy
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Deutsche Bank maintained a Buy rating on Deere (NYSE: DE) with a price target of $110.00. Analyst Vishal Shah thinks concerns could be overblown and he sees upside to EPS estimates.
"We believe large ag equipment related concerns are overblown and see upside to DE's 2014 & 2015 cons EPS est. Our checks, bottoms up supply demand analysis of the sector, as well as breakdown of DE's earnings power suggests declines will not be as high. This is further supported by improving ag fundamentals including a recent strengthening of crop prices (corn & soy up 20% & 13% YTD vs DE of 1%). Cons est imply >20% YoY declines for large ag equipment in '14 & '15 vs DBe of 15-20% and ~10%, respectively. We believe cons will likely revise est upwards which should help the stock grind higher. We reiterate our constructive view on DE going into earnings," he said.
Shares of Deere closed at $92.77 yesterday.
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