Strategic Finance
Deere & Co backed by three big investment banks |
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| Strategic Finance | |
| Written by Paul Williams | |
| Thursday, 20 May 2010 | |
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52 percent increase in sales of heavy construction equipment to post a profit gain of 16 percent for the quarter.
Deere & Company (NYSE:DE) stock has been singled out by thee major investment banks for strong future performance. Morgan Stanley upped their target share price on Deere stock to 70, that is 18.91% higher than yesterday's close at 58.87. JPMorgan set their target at 72, therefore seeing a potential upside of 22.30% on the stock. Barclays Capital are more bullish having set their target price at 79, 34.19% higher than at yesterday's close. Recent performance at the company is behind the upgrades: Deere & Co rode a 52 percent increase in sales of heavy construction equipment to post a profit gain of 16 percent for the quarter ended April 30. Iowa's largest manufacturing employer had $547.5 million in net income, or $1.28 per share, in the quarter. The company absorbed a charge of $130 million in tax expenses during the quarter that it attributed to higher costs due to the recently enacted health care bill, which repealed a corporate tax break for retirees' prescription drug costs. Construction equipment sales had lagged in 2009 because of the slump in building. Deere said the rebound was a sign of a resurgence in the economy. Sales of agricultural equipment rose by 1 percent for the quarter, but Deere said it expects a sales gain of 9 to 11 percent or more this year for its agricultural and turf equipment divisions.
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