Deere & Co is trading at $85.40. The stock is down 8.8% since it revealed its second-quarter earnings in May, when revenues missed expectations but EPS exceeded estimates. The company also lowered its full earnings forecast. Falling agricultural commodity prices have stemmed the sales of farm machinery - in 2013 over 75% of Deere & Co’s revenue came from agricultural machinery sales. Sales from forestry and construction equipment account for 16% of the company’s income. An upturn in the US housing market has prompted the company to increase its sales forecast for construction equipment.
Recently Caterpillar posted a rise in profits but a decline in revenues. The company also adjusted its full-year sales forecast lower, citing a slowdown in Chinese construction as one of the factors. Year-to-date, Deere & Co is down 6.3% while Caterpillar is up 13% over the same period.
There are similarities between the two, but keep in mind Deere & Co is more farming-focused while Caterpillar is more mining-focused. Equity analysts are relatively neutral on Deere & Co; out of the 24 ratings, four are buys, 15 are holds and five are sells. The stock is receiving support at the $84 level. Good figures and a positive outlook could put the stock on a path to $88.34.