DeBlase maintains a Hold rating on the company, while lowering the price target from $95 to $92.
“We have tweaked our model slightly, predominately within the C&F segment given that peers broadly reported weaker-than-expected NA construction volumes (and pricing) during the recently ended 3Q reporting season,” the analyst mentioned.
DeBlase expects Deere to report its
Margins are expected to have declined 290 bps year-on-year, as compared to the 170 bps expansion in Q3.
All Eyes On Guidance
The net income for the full year is estimated at $1.37 billion, marginally ahead of the guidance of $1.35 billion.
“To some extent, 4Q earnings results will not be the predominant focus of Wednesday’s earnings release, since Deere will also initiate
The analyst estimated a 3 percent year-on-year organic revenue decline for the Equipment Ops segment, with expectations of Deere having achieved $250 million of its announced $500 million cost savings program for 2017–18.
“While it is possible that management may elect to guide the top-line more conservatively, we believe this could be compensated by a pull-forward of cost savings into FY17e, and so it is possible that management guides to current cons of $1.2 billion net income,” DeBlase stated.
|Oct 2016||Wells Fargo||Upgrades||Underperform||Outperform|
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