Stock Groups

Deere Falls on Sales Miss, JPMorgan Sees ‘Aggressive’ Guidance and Downside Risk -Breaking

[ad_1]

© Reuters. Deere (DE), falls on sales Miss JPMorgan sees aggressive guidance and downside risk

By Senad Karaahmetovic

Shares of Deere & Company (NYSE:) are down nearly 6% in premarket trading Friday after the company reported lower-than-expected FQ2 net sales.

FQ2 saw a total of $12.03 billion, which was below the consensus estimate of $13.23 million. DE’s EPS was $6.81 above the analyst estimates of $6.71.

Deere anticipates FY net income between $7.4 and $6.7 billion. This is up from its previous forecast range of $6.7 to $7.1 billion. Analyst consensus was $6.99 billion. Deere stated that the FY net income guidance included a $220m gain from special articles.

Deere increased its guidance on net income for the entire year. This guidance beats the average analyst estimation.

“Looking ahead, we believe demand for farm equipment will continue benefiting from positive fundamentals in spite of availability concerns and inflationary pressures affecting our customers’ input costs,” the company said.

According to the company, its exposure to Russia-Ukraine conflict was $454 Million as of May 1st.

J.P. Morgan analyst Tami Zakaria sees “risk-reward skewed to the downside as guidance may prove aggressive unless supply chain dramatically improves in the back half.”

“We believe the stock will be met with investor skepticism and risk-reward is skewed to the downside in the near term,” Zakaria added.

Jerry Revich, an analyst at Goldman Sachs is positive about DE shares.

“We maintain our Buy rating on the stock given accelerating precision ag adoption and ag machinery share of farmer capex that is approaching normalized levels this year following an extended capital stock reduction cycle.”

[ad_2]