A lot of industrial companies posted better than expected margins this quarter, but I believe Deere's (DE) strength will prove more durable, as the company is seeing some meaningful benefits from structural changes that have been years in the making. On top of that, Deere has drivers that go beyond traditional drivers like commodity prices, farmer balance sheets, and fleet age, with technology-driven precision ag offerings that deliver demonstrated benefits to farmers.
Up about 10% from the fiscal third quarter earnings release, and up almost 40% over the past year, well ahead of peers/rivals like AGCO (AGCO), Caterpillar (CAT), and CNH Industrial (CNHI), these positive drivers are not exactly a secret or meaningfully underappreciated by the Street. That makes valuation tough; the return potential is okay, and I like the momentum in the business and the prospect for more beat-and-raise quarters, but this isn't a value pick.
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Precision Ag Gives Deere A Driver Beyond Commodities And Fleet Dynamics
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