Why Deere Is Off and Running Again
Up by 81% over the past 12 months and 34% year to date, Deere & Company (NYSE: DE) stock has escaped the doldrums it has long been mired in. The company once again has growing revenue, earnings, and stock value. The fiscal third-quarter report it recently delivered shows circumstances are favorable for it right now, and it's taking positive actions to profit from the opportunity -- though a few potential stumbling blocks remain.
The economic results of the COVID-19 pandemic set several trends in motion beneficial to Deere and other equipment manufacturers. Rising commodity prices are infusing more money into the agricultural sector. That is enabling farmers and agribusinesses to buy new equipment to meet rising demand or replace older, worn-out gear.
A Goldman Sachs rating upgrade for Georgia-based agricultural machinery maker Agco (NYSE: AGCO) included a research note saying its decision was "driven by our positive outlook on a multi-year recovery in long-cycle ag [agricultural] equipment demand." The note also said "declines in used equipment inventories over the past seven years (60+% decline) and rising used equipment values (+26% yoy) signal a strong multi-year need for" new equipment.
Source Fool.com
