Why Shares Of Deere Are Up By 10% Today?

Deere Video 19.02.21.

Deere Easily Beat Earnings Estimates

Shares of Deere are up by more than 10% in today’s trading session after the company provided its quarterly report which was much better than analysts expected.

Deere reported revenue of $9.11 billion and GAAP earnings of $3.87 per share, beating analyst estimates on both earnings and revenue. The average earnings estimate for this quarter was $2.16 per share so Deere exceeded earnings estimates by as much asĀ  $1.71 per share. Compared to the same quarter of the previous year, Deere managed to grow its revenue by 19% while its earnings inreased by 137%.

The company noted that improving conditions in the farm and construction sectors boosted its performance. Deere expects that current positive catalysts will remain in place in 2021 so it has increased its full-year earnings forecast to $4.6 billion – $5 billion. Most likely, analysts will soon update their current full-year forecasts to reflect the recent developments which may provide some additional support to the stock.

What’s Next For Deere?

Shares of Deere managed to gain strong upside momentum after the release of the quarterly report which is not surprising given the strength of the company’s financial results.

U.S. Treasury yields continue to rise which means that investors are positioning themselves for higher inflation. Inflationary environment is typically favorable for cyclical industries, and Deere may enjoy increased demand and higher prices for its products.

Despite the strength of the recent upside move, Deere is valued at just above 20 forward P/E which may be considered cheap for a company that shows strong results in the current price environment.

It remains to be seen whether will we see notable rotation from tech stocks into cyclical stocks if yields continue to rise, but Deere shares have decent chances to continue their current upside trend even without such rotation.

For a look at all of today’s economic events, check out our economic calendar.