{"id":24668,"date":"2016-01-26T17:40:02","date_gmt":"2016-01-26T23:40:02","guid":{"rendered":"http:\/\/news.medill.northwestern.edu\/chicago\/?p=24668"},"modified":"2016-02-10T12:00:41","modified_gmt":"2016-02-10T18:00:41","slug":"deere-co-expects-a-decline-but-most-analysts-say-hold-or-even-buy","status":"publish","type":"post","link":"https:\/\/news.medill.northwestern.edu\/chicago\/deere-co-expects-a-decline-but-most-analysts-say-hold-or-even-buy\/","title":{"rendered":"Deere & Co. expects a decline, but most analysts say Hold or even Buy"},"content":{"rendered":"

By Alison Martin<\/strong><\/p>\n

Deere & Co., producer of\u00a0the iconic green-and-yellow tractor brand John Deere, recently warned investors to expect sales declines by 7\u00a0percent in 2016–but most analysts are still telling investors to hold onto their stock.<\/p>\n

The company\u2019s sales remain tethered to the ever-changing agriculture industry, which faces a number of problems. The yearly demand for agricultural products, soil conditions, weather conditions and the non-food uses for some crops (think ethanol), among others, can have favorable or adverse affects on the company\u2019s net income.<\/p>\n

John Deere Capital Corp., the finance subsidiary that assist farmers with loans needed to buy Deere equipment, may also face trouble in the upcoming year. As dips in the agricultural industry occur, more loan defaults as well as rising interest rates could\u00a0impair the company\u2019s net income. The Federal Reserve’s December hike in its\u00a0key interest rate could affect whether farmers purchase equipment, and the\u00a0Fed may raise rates\u00a0further in 2016.<\/p>\n

<\/p>\n

Last August Deere\u2019s stock dropped dramatically over nine days, starting at $94.34 per share on Aug. 14 and landing at $79.09 on Aug. 25. Part of its decline may have come from the company\u2019s Aug. 15 announcement to lay off 600 workers at plants in Illinois, Iowa and Kansas.<\/p>\n

Deere & Co Monthly Stock Prices, 2014-2016<\/h2>\n

[field name=”chart”]<\/p>\n

Graph: Deere & Co’s stock suffered several drops over the last two years. (Alison Martin\/MEDILL)<\/div>\n

Though the stock made a slight recovery over the next few days, it dropped once more on Oct.1, reaching its lowest point at $72.89. Today the stock still\u00a0hovers around $72.<\/p>\n

According to the company\u2019s most recent 10-K filing in November, quarterly net income was $351.2 million or $1.08 per diluted share, down 46 percent from the 2014 quarter net income of $649.2 million or $1.83 per diluted share.<\/p>\n

In\u00a0a press release Deere estimated a 7 percent decline in sales in fiscal 2016, and earnings of\u00a0\u201capproximately $1.4 billion.\u201d The company\u00a0said a \u201cweakness in global markets for farm and construction equipment leads a\u00a0to decline in sales and earnings for the\u00a0quarter and full year.\u201d<\/p>\n

“Although our forecast calls for lower results in the year ahead, the outlook represents a level of performance that is considerably better than we have experienced in previous downturns,” Chairman and CEO Samuel R. Allen said in the press release. “This shows the continuing success of our efforts to establish a more durable business model and a wider range of revenue sources.”<\/p>\n

In addition to agriculture and turf equipment, Deere produces construction and forestry equipment.\u00a0Analyst Matt Arnold at Edward D. Jones & Co. LP believes these two ventures may be enough to prop up declining agriculture equipment sales. It\u00a0should\u00a0be noted, however, that Deere expects a 5 percent decline in its construction and forestry division.<\/p>\n

Despite the gloom, most analysts are telling investors to buy or to\u00a0hold onto their stock, while at the same time an unusual number of\u00a0analysts\u00a0 recommend selling. Of 26 analysts tallied by Bloomberg, six\u00a0say sell, balanced by six who say buy.<\/p>\n

\u201cWe give Deere credit for operating well in a challenging time,\u201d analyst Lawrence De Maria of William Blair & Co. said in\u00a0 note, \u201cbut believe that there is little reason for optimism in the next couple of years and that next year may be set up for disappointment. Ultimately, we still believe it is too early to get excited about farm equipment stocks as we enter the third year of a downturn in North America following a super cycle that occurred for the prior decade or so.\u201d<\/p>\n

Not all analysts agree. Arnold of Edward D. Jones\u00a0isn’t ready to sell just yet.<\/p>\n

\u201cI think they [analysts] are looking at it on a too short-term of a base on farm fundamentals being weak,” he said.<\/p>\n

Arnold still has high hopes for Deere stock and recommends buying it.<\/p>\n

\u201cWe think the stock can start to act better especially if it becomes apparent that farm fundamentals are near trough,” he said.<\/p>\n

Despite analyst concerns,\u00a0CEO\u00a0Allen remains positive, asserting that the company\u2019s future is secure.<\/p>\n

“All in all,\u201d he said, \u201cwe have confidence in the company’s present direction and firmly believe it is on track to deliver significant value to our customers and investors in the years to come.”<\/p>\n

Photo at the top: A Deere forestry tractor at work\u00a0in\u00a0the U.K.\u00a0 (M\u00e0rtainn MacDh\u00f2mhnaill\/Creative Commons license via Flickr<\/a>)<\/div>\n","protected":false},"excerpt":{"rendered":"

By Alison Martin Deere & Co., producer of\u00a0the iconic green-and-yellow tractor brand John Deere, recently warned investors to expect sales declines by 7\u00a0percent in 2016–but most analysts are still telling investors to hold onto their stock. The company\u2019s sales remain tethered to the ever-changing agriculture industry, which faces a number of problems. The yearly demand […]<\/p>\n","protected":false},"author":201,"featured_media":24721,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27,585],"tags":[],"class_list":["post-24668","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-winter-2016"],"yoast_head":"\nDeere & Co. expects a decline, but most analysts say Hold or even Buy - Medill Reports Chicago<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/news.medill.northwestern.edu\/chicago\/deere-co-expects-a-decline-but-most-analysts-say-hold-or-even-buy\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Deere & Co. expects a decline, but most analysts say Hold or even Buy - Medill Reports Chicago\" \/>\n<meta property=\"og:description\" content=\"By Alison Martin Deere & Co., producer of\u00a0the iconic green-and-yellow tractor brand John Deere, recently warned investors to expect sales declines by 7\u00a0percent in 2016–but most analysts are still telling investors to hold onto their stock. The company\u2019s sales remain tethered to the ever-changing agriculture industry, which faces a number of problems. The yearly demand […]\" \/>\n<meta property=\"og:url\" content=\"https:\/\/news.medill.northwestern.edu\/chicago\/deere-co-expects-a-decline-but-most-analysts-say-hold-or-even-buy\/\" \/>\n<meta property=\"og:site_name\" content=\"Medill Reports Chicago\" \/>\n<meta property=\"article:published_time\" content=\"2016-01-26T23:40:02+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2016-02-10T18:00:41+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/news.medill.northwestern.edu\/chicago\/wp-content\/uploads\/sites\/3\/2016\/01\/Deere_Co_1100.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1100\" \/>\n\t<meta property=\"og:image:height\" content=\"624\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"alisonmartin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"alisonmartin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/news.medill.northwestern.edu\/chicago\/deere-co-expects-a-decline-but-most-analysts-say-hold-or-even-buy\/\",\"url\":\"https:\/\/news.medill.northwestern.edu\/chicago\/deere-co-expects-a-decline-but-most-analysts-say-hold-or-even-buy\/\",\"name\":\"Deere & Co. expects a decline, but most analysts say Hold or even Buy - Medill Reports Chicago\",\"isPartOf\":{\"@id\":\"https:\/\/news.medill.northwestern.edu\/chicago\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/news.medill.northwestern.edu\/chicago\/deere-co-expects-a-decline-but-most-analysts-say-hold-or-even-buy\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/news.medill.northwestern.edu\/chicago\/deere-co-expects-a-decline-but-most-analysts-say-hold-or-even-buy\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/news.medill.northwestern.edu\/chicago\/wp-content\/uploads\/sites\/3\/2016\/01\/Deere_Co_1100.jpg\",\"datePublished\":\"2016-01-26T23:40:02+00:00\",\"dateModified\":\"2016-02-10T18:00:41+00:00\",\"author\":{\"@id\":\"https:\/\/news.medill.northwestern.edu\/chicago\/#\/schema\/person\/b6d8b8efab1cb1b1ae38f8d83c771a1b\"},\"breadcrumb\":{\"@id\":\"https:\/\/news.medill.northwestern.edu\/chicago\/deere-co-expects-a-decline-but-most-analysts-say-hold-or-even-buy\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/news.medill.northwestern.edu\/chicago\/deere-co-expects-a-decline-but-most-analysts-say-hold-or-even-buy\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/news.medill.northwestern.edu\/chicago\/deere-co-expects-a-decline-but-most-analysts-say-hold-or-even-buy\/#primaryimage\",\"url\":\"https:\/\/news.medill.northwestern.edu\/chicago\/wp-content\/uploads\/sites\/3\/2016\/01\/Deere_Co_1100.jpg\",\"contentUrl\":\"https:\/\/news.medill.northwestern.edu\/chicago\/wp-content\/uploads\/sites\/3\/2016\/01\/Deere_Co_1100.jpg\",\"width\":1100,\"height\":624,\"caption\":\"Deere & Co.'s tractor in U.K. forest. M\u00e0rtainn MacDh\u00f2mhnaill https:\/\/www.flickr.com\/photos\/martainn\/2577744037\/in\/photolist-3Z6sW-4VMBuH-jCAv9D-zYei5s-4VVB1o-2NWkY7-4VMCCP-3C3XCf-33iptF-au4bAG-egsSC1-5HacEM-kzBLdV-6PxaJ5-5ittV-jdFmVC-5HadxD-5HexcY-5HexAh-5HadSV-9dHUfX-5udWQy-yvkies-9dLXCL-zpV7dq-yu5g36-tnKdwU-8xSds3-tS7248-yecxtU-7CECca-kcxDdw-sAma9J-9dHU1e-4jfAcc-yhu9qQ-2NRPGk-9eMjzG-nTJ2ps-9dLXsb-5HevGd-5HacxX-6bSHp1-2HdNb-ezM44c-5egKWg-6w75dR-4VVD1C-ehujop-mxW43x\/\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/news.medill.northwestern.edu\/chicago\/deere-co-expects-a-decline-but-most-analysts-say-hold-or-even-buy\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/news.medill.northwestern.edu\/chicago\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Deere & Co. expects a decline, but most analysts say Hold or even Buy\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/news.medill.northwestern.edu\/chicago\/#website\",\"url\":\"https:\/\/news.medill.northwestern.edu\/chicago\/\",\"name\":\"Medill Reports Chicago\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/news.medill.northwestern.edu\/chicago\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/news.medill.northwestern.edu\/chicago\/#\/schema\/person\/b6d8b8efab1cb1b1ae38f8d83c771a1b\",\"name\":\"alisonmartin\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/news.medill.northwestern.edu\/chicago\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/943dbbdfe8582962490ddb378bd125698ec437cddec377906d0507e155f7b894?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/943dbbdfe8582962490ddb378bd125698ec437cddec377906d0507e155f7b894?s=96&d=mm&r=g\",\"caption\":\"alisonmartin\"},\"url\":\"https:\/\/news.medill.northwestern.edu\/chicago\/author\/alisonmartin\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Deere & Co. expects a decline, but most analysts say Hold or even Buy - Medill Reports Chicago","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/news.medill.northwestern.edu\/chicago\/deere-co-expects-a-decline-but-most-analysts-say-hold-or-even-buy\/","og_locale":"en_US","og_type":"article","og_title":"Deere & Co. expects a decline, but most analysts say Hold or even Buy - Medill Reports Chicago","og_description":"By Alison Martin Deere & Co., producer of\u00a0the iconic green-and-yellow tractor brand John Deere, recently warned investors to expect sales declines by 7\u00a0percent in 2016–but most analysts are still telling investors to hold onto their stock. The company\u2019s sales remain tethered to the ever-changing agriculture industry, which faces a number of problems. The yearly demand […]","og_url":"https:\/\/news.medill.northwestern.edu\/chicago\/deere-co-expects-a-decline-but-most-analysts-say-hold-or-even-buy\/","og_site_name":"Medill Reports Chicago","article_published_time":"2016-01-26T23:40:02+00:00","article_modified_time":"2016-02-10T18:00:41+00:00","og_image":[{"width":1100,"height":624,"url":"https:\/\/news.medill.northwestern.edu\/chicago\/wp-content\/uploads\/sites\/3\/2016\/01\/Deere_Co_1100.jpg","type":"image\/jpeg"}],"author":"alisonmartin","twitter_card":"summary_large_image","twitter_misc":{"Written by":"alisonmartin","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/news.medill.northwestern.edu\/chicago\/deere-co-expects-a-decline-but-most-analysts-say-hold-or-even-buy\/","url":"https:\/\/news.medill.northwestern.edu\/chicago\/deere-co-expects-a-decline-but-most-analysts-say-hold-or-even-buy\/","name":"Deere & Co. expects a decline, but most analysts say Hold or even Buy - Medill Reports Chicago","isPartOf":{"@id":"https:\/\/news.medill.northwestern.edu\/chicago\/#website"},"primaryImageOfPage":{"@id":"https:\/\/news.medill.northwestern.edu\/chicago\/deere-co-expects-a-decline-but-most-analysts-say-hold-or-even-buy\/#primaryimage"},"image":{"@id":"https:\/\/news.medill.northwestern.edu\/chicago\/deere-co-expects-a-decline-but-most-analysts-say-hold-or-even-buy\/#primaryimage"},"thumbnailUrl":"https:\/\/news.medill.northwestern.edu\/chicago\/wp-content\/uploads\/sites\/3\/2016\/01\/Deere_Co_1100.jpg","datePublished":"2016-01-26T23:40:02+00:00","dateModified":"2016-02-10T18:00:41+00:00","author":{"@id":"https:\/\/news.medill.northwestern.edu\/chicago\/#\/schema\/person\/b6d8b8efab1cb1b1ae38f8d83c771a1b"},"breadcrumb":{"@id":"https:\/\/news.medill.northwestern.edu\/chicago\/deere-co-expects-a-decline-but-most-analysts-say-hold-or-even-buy\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/news.medill.northwestern.edu\/chicago\/deere-co-expects-a-decline-but-most-analysts-say-hold-or-even-buy\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/news.medill.northwestern.edu\/chicago\/deere-co-expects-a-decline-but-most-analysts-say-hold-or-even-buy\/#primaryimage","url":"https:\/\/news.medill.northwestern.edu\/chicago\/wp-content\/uploads\/sites\/3\/2016\/01\/Deere_Co_1100.jpg","contentUrl":"https:\/\/news.medill.northwestern.edu\/chicago\/wp-content\/uploads\/sites\/3\/2016\/01\/Deere_Co_1100.jpg","width":1100,"height":624,"caption":"Deere & Co.'s tractor in U.K. forest. M\u00e0rtainn MacDh\u00f2mhnaill https:\/\/www.flickr.com\/photos\/martainn\/2577744037\/in\/photolist-3Z6sW-4VMBuH-jCAv9D-zYei5s-4VVB1o-2NWkY7-4VMCCP-3C3XCf-33iptF-au4bAG-egsSC1-5HacEM-kzBLdV-6PxaJ5-5ittV-jdFmVC-5HadxD-5HexcY-5HexAh-5HadSV-9dHUfX-5udWQy-yvkies-9dLXCL-zpV7dq-yu5g36-tnKdwU-8xSds3-tS7248-yecxtU-7CECca-kcxDdw-sAma9J-9dHU1e-4jfAcc-yhu9qQ-2NRPGk-9eMjzG-nTJ2ps-9dLXsb-5HevGd-5HacxX-6bSHp1-2HdNb-ezM44c-5egKWg-6w75dR-4VVD1C-ehujop-mxW43x\/"},{"@type":"BreadcrumbList","@id":"https:\/\/news.medill.northwestern.edu\/chicago\/deere-co-expects-a-decline-but-most-analysts-say-hold-or-even-buy\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/news.medill.northwestern.edu\/chicago\/"},{"@type":"ListItem","position":2,"name":"Deere & Co. expects a decline, but most analysts say Hold or even Buy"}]},{"@type":"WebSite","@id":"https:\/\/news.medill.northwestern.edu\/chicago\/#website","url":"https:\/\/news.medill.northwestern.edu\/chicago\/","name":"Medill Reports Chicago","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/news.medill.northwestern.edu\/chicago\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/news.medill.northwestern.edu\/chicago\/#\/schema\/person\/b6d8b8efab1cb1b1ae38f8d83c771a1b","name":"alisonmartin","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/news.medill.northwestern.edu\/chicago\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/943dbbdfe8582962490ddb378bd125698ec437cddec377906d0507e155f7b894?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/943dbbdfe8582962490ddb378bd125698ec437cddec377906d0507e155f7b894?s=96&d=mm&r=g","caption":"alisonmartin"},"url":"https:\/\/news.medill.northwestern.edu\/chicago\/author\/alisonmartin\/"}]}},"_links":{"self":[{"href":"https:\/\/news.medill.northwestern.edu\/chicago\/wp-json\/wp\/v2\/posts\/24668","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/news.medill.northwestern.edu\/chicago\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/news.medill.northwestern.edu\/chicago\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/news.medill.northwestern.edu\/chicago\/wp-json\/wp\/v2\/users\/201"}],"replies":[{"embeddable":true,"href":"https:\/\/news.medill.northwestern.edu\/chicago\/wp-json\/wp\/v2\/comments?post=24668"}],"version-history":[{"count":0,"href":"https:\/\/news.medill.northwestern.edu\/chicago\/wp-json\/wp\/v2\/posts\/24668\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/news.medill.northwestern.edu\/chicago\/wp-json\/wp\/v2\/media\/24721"}],"wp:attachment":[{"href":"https:\/\/news.medill.northwestern.edu\/chicago\/wp-json\/wp\/v2\/media?parent=24668"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/news.medill.northwestern.edu\/chicago\/wp-json\/wp\/v2\/categories?post=24668"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/news.medill.northwestern.edu\/chicago\/wp-json\/wp\/v2\/tags?post=24668"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}