Deere Stock Dips After Earnings

Deere was hit by higher costs amid the U.S.-China trade spat

Deputy Editor
Feb 15, 2019 at 10:22 AM
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The shares of Deere & Company (NYSE:DE) are down in early trading, after the company announced fiscal first-quarter earnings that fell short of analysts' expectations. The tractor concern blamed the rising costs of raw materials and logistics, due to the U.S.-China trade war. After briefly turning higher earlier, DE stock was last seen 0.8% lower at $161.06.

Since its most recent pullback to the $130 area in late December, DE stock has rallied roughly 25% atop support from its 20-day moving average. The shares have been attempting to break through the $165 level, and beyond that lies their all-time high of $175.22, tagged in February 2018.

The majority of analysts are optimistic on the stock, with six giving Deere a "strong buy" rating, and one handing out a "buy." That's compared to five tepid "holds" and not one "sell" rating. On the flip side, the consensus 12-month price target of $176 is a modest 8% premium to current levels. Should DE shares break north of recent resistance -- possibly in the wake of a favorable outcome between U.S.-China trade talks -- price-target hikes could ensue.

In the options pits, bears were piling on the equity ahead of earnings. On the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) DE sports a 10-day put/call volume ratio of 1.18 that sits in the 85th percentile of its annual range. This means that traders bought to open Deere puts over calls at an accelerated clip in the past two weeks.

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