3 Reasons Deere's Stock Is Hitting All-Time Highs
Perhaps even veteran observers of agriculture and construction equipment manufacturer Deere (NYSE: DE) have been surprised at the company's share performance this year. Despite a contraction in global gross domestic product -- the World Bank estimates that global GDP will decrease 5% in 2020 -- Deere's stock has raced ahead by 18% so far this year, consistently setting new all-time highs. What's fueling the current confidence in such an economically sensitive, cyclical stock?
The company's fiscal third-quarter 2020 earnings, issued on Aug. 21, provide plenty of clues. Let's look at three details from the release that clarify why the market is reluctant to bet against Deere.
Deere's agriculture and turf segment, which makes up just under two-thirds of total company revenue, experienced a year-over-year sales decline of 4.6% in the third quarter, and through the first nine months of fiscal 2020, sales have decreased 10% to $16.1 billion. In last week's report, management chalked in an expected full-year sales dip of 10% in the agricultural segment. This cheered investors because it's an improvement over the range provided in the second quarter of a 10%-15% decline.
Source Fool.com
