Dismal Forecast Overshadows Deere's Quarterly Win

Heavy equipment manufacturer Deere & Co (NYSE:DE) surpassed top- and bottom-line expectations for the fiscal first quarter, but also cut its 2024 profit forecast due to demand concerns amid higher borrowing rates and lower crop prices. Ahead of the open, DE is down 3.6% at $371.

Should these losses hold, the security will break below a floor at the $375 level, which has been in place since a December bull gap. Meanwhile, the $405 region rejected the equity's early January pullback. Over the past six months, Deere stock dropped more than 9%. 

Short-term options traders have been much more bullish than usual. This is per DE's Schaeffer's put/call open interest ratio (SOIR) of 1.04 that sits in the 11ht percentile of annual readings. An unwinding of this pessimism could pressure the stock lower still.

The brokerage bunch is yet to chime in on the earnings results, but there's plenty of room for pessimism to fester in the form of downgrades and/or price-target cuts. Of the 20 firms in coverage, 12 rate DE a "buy" or better, while the 12-month consensus target price of $426.10 is a 15% premium to yesterday's close.