Deere & Company (NYSE: DE) manufactures various equipment worldwide and operates through three segments: agriculture and turf, construction and forestry, and financial services. Deere shares have been moving in an uptrend last several months, and the company’s business has proven stability throughout the Covid-19 pandemic.
Fundamental analysis: Deere demonstrated strong execution in the second quarter
Deere & Company reported better than expected second fiscal quarter results this month; total revenue has increased by 30.4% Y/Y to $12.06 billion, while the GAAP EPS was $5.68 (beats by $1.09). The company demonstrated strong execution in the second quarter and achieved significantly higher levels of profitability.
Total revenue has increased above expectations (+1.5 billion), and the company raised its outlook for the fiscal 2021 year across its major business segments. Deere expects a net income of $5.3 billion to $5.7 billion for fiscal 2021, while the board of directors announced that the company is prepared for an accelerating inflationary environment.
“Fundamentals have improved significantly throughout the first half of the year, and the improved sentiment is reflected in the most recent status of our order books, which extend through the rest of the year and in some cases, into fiscal year ’22. Meanwhile, markets for our construction and forestry segment also strengthened in the second quarter, leading to improved levels of profitability and a heightened outlook for the rest of the year,” said Brent Norwood, manager of Deere & Company.
The board of directors declared a $0.90/quarterly share dividend which will be payable on August 09 to stockholders of record as of June 30, 2021. Jefferies analyst Stephen Volkmann said that updated forecast and strong pricing should support the shares, while research firm Volkmann also has a positive view for Deere
