Deere (DE) Outperforms Broader Market: What You Need to Know

In the latest close session, Deere (DE) was up +1.94% at $519.20. The stock's change was more than the S&P 500's daily gain of 0.28%. Elsewhere, the Dow gained 0.43%, while the tech-heavy Nasdaq added 0.09%.

Heading into today, shares of the agricultural equipment manufacturer had lost 2.21% over the past month, lagging the Industrial Products sector's gain of 5.67% and the S&P 500's gain of 4.37%.

Analysts and investors alike will be keeping a close eye on the performance of Deere in its upcoming earnings disclosure. On that day, Deere is projected to report earnings of $4.6 per share, which would represent a year-over-year decline of 26.87%. Simultaneously, our latest consensus estimate expects the revenue to be $10.21 billion, showing a 10.32% drop compared to the year-ago quarter.

For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $18.82 per share and a revenue of $38.05 billion, representing changes of -26.54% and -14.99%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Deere. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. At present, Deere boasts a Zacks Rank of #3 (Hold).

From a valuation perspective, Deere is currently exchanging hands at a Forward P/E ratio of 27.06. Its industry sports an average Forward P/E of 21.81, so one might conclude that Deere is trading at a premium comparatively.

Investors should also note that DE has a PEG ratio of 3.23 right now. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. As the market closed yesterday, the Manufacturing - Farm Equipment industry was having an average PEG ratio of 3.23.

The Manufacturing - Farm Equipment industry is part of the Industrial Products sector. Currently, this industry holds a Zacks Industry Rank of 174, positioning it in the bottom 30% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Remember to apply Zacks.com to follow these and more stock-moving metrics during the upcoming trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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