Ready to Jump After Recent Trade: Deere & Company (DE)

Deere & Company (NYSE: DE) stock jumped 5.03% on Wednesday to $437.52 against a previous-day closing price of $416.56. With 5.08 million shares changed hands, the volume of the stock remained heavier than its average volume of 1.43 million shares. During the session, the Farm & Heavy Construction Machinery company that operates in wider Industrials sector, reached to the highest price of $448.40 whereas the lowest price it dropped to was $428.88. The 52-week range on DE shows that it touched its highest point at $446.76 and its lowest point at $283.81 during that stretch. It currently has a 1-year price target of $401.91. With its current market cap of 131.65 billion, DE has annualized dividend of $4.52 while the current yield stands at 1.03%. Beta for the stock currently stands at 1.09.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of DE was up-trending over the past week, with a rise of 7.66%, but this was up by 11.72% over a month. Three-month performance surged to 12.72% while six-month performance rose 27.57%. The stock gained 25.26% in the past year, while it has gained 27.60% so far this year. A look at the trailing 12-month EPS for DE yields 20.01 with Next year EPS estimates of 26.18. For the next quarter, that number is 7.12. This implies an EPS growth rate of 118.60% for this year and 13.98% for next year. EPS is expected to grow by 13.16% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 31.60%.

Float and Shares Shorts:

At present, 304.10 million DE shares are outstanding with a float of 301.28 million shares on hand for trading. On Oct 13, 2022, short shares totaled 3.33 million, which was 1.10% higher than short shares on Sep 14, 2022. In addition to Mr. John C. May II as the firm’s Chairman & CEO, Mr. Rajesh Kalathur serves as its Chief Information Officer.

Institutional Ownership:

Through their ownership of 78.90% of DE’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 39.13% of DE, in contrast to 32.36% held by mutual funds. Shares owned by individuals account for 10.93%. As the largest shareholder in DE with 6.94% of the stake, The Vanguard Group, Inc. holds 20,936,189 shares worth 20,936,189. A second-largest stockholder of DE, BlackRock Fund Advisors, holds 11,787,971 shares, controlling over 3.91% of the firm’s shares. SSgA Funds Management, Inc. is the third largest shareholder in DE, holding 10,815,160 shares or 3.58% stake. With a 2.74% stake in DE, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 8,254,971 shares are owned by the mutual fund manager. The Vanguard 500 Index Fund, which owns about 2.11% of DE stock, is the second-largest Mutual Fund holder. It holds 6,364,331 shares valued at 2.52 billion. SPDR S&P 500 ETF Trust holds 1.04% of the stake in DE, owning 3,131,136 shares worth 1.24 billion.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for DE since 26 analysts follow the stock currently. There are 14 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 8 believe that the stock is worth HOLDING, 3 give it an OVERWEIGHT rating, and 1 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With DE analysts setting a high price target of $582.00 and a low target of $342.00, the average target price over the next 12 months is $441.23. Based on these targets, DE could surge 33.02% to reach the target high and fall by -21.83% to reach the target low. Reaching the average price target will result in a growth of 0.85% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. DE will report FY 2023 earnings on 11/22/2023. Analysts have provided yearly estimates in a range of $29.62 being high and $24.40 being low. For DE, this leads to a yearly average estimate of $27.25. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. Deere & Company surprised analysts by $0.33 when it reported $7.44 EPS against a consensus estimate of $7.11. The surprise factor in the prior quarter was -$0.49. Based on analyst estimates, the high estimate for the next quarter is $6.58 and the low estimate is $4.74. The average estimate for the next quarter is thus $5.51.

Summary of Insider Activity:

Insiders traded DE stock several times over the past three months with 4 Buys and 11 Sells. In these transactions, 24,118 shares were bought while 12,750 shares were sold. The number of buy transactions has increased to 42 while that of sell transactions has risen to 64 over the past year. The total number of shares bought during that period was 210,476 while 141,355 shares were sold.

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