Analyst Upgrades Deere & Company, Raises Price Target
November 23, 2009 8:52 AM
On Monday Morgan Stanley upgraded Deere & Company (NYSE: DE) to “Overweight” rating from the previous “Equal Weight” and revised their price target to $64 from $48 on the back of Structural US growth and potential for recovery in Brazil.
The Firm quoted “Demand for US farm equipment is growing as customers add acreage, a secular phenomenon that is widely underestimated. Cyclical factors are also more favorable than most believe, with corn likely higher into 2010 and the potential for recovery in Brazil. We see this as a rare opportunity where consensus is too conservative on both cyclical and secular factors, making DE risk reward highly favorable vs other machinery stocks.”
The Firm also said “A retracement of half the recent high hp market plunge in Brazil, plus 5 points of share, would offset a 10% US tractor fall. Deere gained 9 share pts. in ’09.”
In pre-market trading, shares of DE are up 3.30%, Mosaic (NYSE:MOS) is up 1.25% and Potash (NYSE:POT) is up 1.35%.
