27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
Shares of Deere & Company (NYSE:DE) have sharply rebounded from May's weakness and the recovery now reflects the company's outlook, according to UBS.
The Analyst
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UBS analyst Steven Fisher downgraded Deere from Buy to Neutral with a price target lifted from $158 to $167.
The Thesis
UBS's proprietary agricultural dealer survey points to a weakening in farming equipment over the next one to two quarters from poor growing conditions and trade concerns, Fisher wrote in the note. Demand will likely remain "restrained" for the near term and 2020 should see a "pick up" in activity.
Specifically, Deere's agricultural business could see a growth rate of 9% to 10% in 2020, which is a "more positive" outlook compared to prior findings. Beyond the current year and into next year, the company sees no change to its long-term replacement demand story
Deere's stock is trading near $163 per share, which implies a P/E of 14 times on EPS estimates of around $11.50 to $12 per share. This is a "reasonable base case" for 2020 and the bull case for shares to trade up to $195 per share would require double-digit growth in agriculture and a low-single digit growth in construction sales.
Price Action
Shares of Deere were trading lower by 1% at $161.98 in Wednesday's pre-market session.
Related Links:
Jefferies Upgrades Deere, Cites 'Significantly Improved Farmer Income Outlook'
Tariffs, Trade Cloud Short-Term Future For Deere, But RBC Says Plow Ahead
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.