3 Reasons Deere Can Continue to Outperform the Industrials Sector
Deere & Company (NYSE: DE) just reported fiscal 2022 third-quarter (ended July 31) numbers that struck a similar tone to those of other industrial companies this year. Higher costs, supply chain issues, and decreased guidance are themes that have been common throughout the first and second quarters of 2022. This sort of earnings reporting is a big part of why the Dow Jones Industrial Average (DJIA) is down about 9.3% for the year.
Deere's stock, however, is up 11.7% over the same timeframe, bucking the trend and outperforming the index. Here's why the stock could continue to outperform going forward.
Like most other commodities this year, crop prices are elevated. Corn and soybean prices are well above what they were in 2020 and 2021. Though farmers face the same inflationary costs as anyone else this year, higher crop prices (and the added revenue they generate) have allowed more farmers to update their fleets. Deere pointed out in its third-quarter earnings report that sales and profit from large farm equipment were up 43% year over year.
Source Fool.com
