Deere Stock Drops After Trade Tensions Ding Outlook

Deere CEO cited "lingering trade tensions" as a catalyst for the subpar guidance

Patrick Martin

Managing Editor

Nov 27, 2019 at 9:56 AM

A notable earnings loser this morning is Deere & Company (NYSE:DE). Although the machinery company reported fiscal fourth-quarter earnings and revenue that topped estimates, Deere issued a full-year profit forecast that fell short of analyst expectations. CEO John May cited "lingering trade tensions" and severe harvesting conditions as catalysts for the drop in new equipment investments.

At last check, Deere stock was down 5.2% to trade at $167.53. on track for its worst single-session drop since Aug. 24. The move lower today takes DE below its 50-day moving average, a trendline not breached on a closing basis since early September. The shares are now 7% off their Nov. 11 record high of $180.47.

It will be interesting to see how analysts react to today's lackluster quarterly report. There are 16 analysts covering DE, and there's an even split between those that dole out "hold" or "strong sell" ratings, and those that maintain "buy" or better opinions. Plus, the equity's consensus 12-month price target of $177 is right on par with last night's closing perch $176.85.

Near-term open interest looks unusually put-heavy on Deere stock. This is according to the Schaeffer's put/call open interest ratio (SOIR) of 1.19, which ranks in the 88th percentile of its annual range.

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