Analyst Says to Sell Deere Stock After Earnings

DE is extending its post-earnings losses today

Nov 29, 2019 at 9:58 AM
facebook twitter linkedin


Analysts are chiming in on Deere & Company (NYSE:DE) this morning, after the farm equipment maker's disastrous turn in the earnings confessional on Wednesday. While DZ Bank downgraded DE stock to "sell" from "hold," UBS lowered its price target to $169 from $180. On the flip side, CFRA on Wednesday night raised its Deere price target to $176 from $158, while RBC last night lifted its target price to $190 from $175.

Options traders, meanwhile, have grown increasingly bullish on Deere stock in recent weeks. At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 10-day call/put volume ratio of 0.97 ranks in the 74th annual percentile. So while puts have outpaced calls on an absolute basis, the rate of call buying relative to put buying has been quicker than usual.

In the wake of Wednesday morning's earnings report, implied volatility on short-term options has imploded -- making it an attractive time to purchase premium. At last check, DE's Schaeffer's Volatility Index (SVI) of 20% registered in the 3rd percentile of its annual range, meaning near-term options have priced in lower volatility expectations just 3% of the time in the past year.

Looking closer at the charts, DE shares plunged 4.3% on Wednesday, breaching their 50-day moving average on a closing basis for the first time since Sept. 9. The stock is extending this downside today, off 0.3% at $168.50, but remains nearly 13% higher year-to-date.

 

 

 

These investors are using the market's volatility to their advantage and scoring triple-digit gains on many of their trades.

Even in today's sideways bear market, this trading strategy has continued to provide consistency and profitability to a small group of investors. By using this approach, these traders are removing directional risk and still hitting triple-digit returns. If you want access to this strategy, and lower risk with higher returns sounds good to you, then don't wait another minute.

Join us now to receive our next trades the moment they come out!

 

Common mistakes options traders make
 


 


 
Special Offers from Schaeffer's Trading Partners