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Deere (DE) to Report Q1 Earnings: Is a Surprise in Store?

Deere & CompanyDE is expected to release first-quarter fiscal 20Array6 results before the opening bell on Feb Array9.

The company had reported better-than-expected earnings in the past, beating the Zacks Consensus Estimate in each of the trailing four quarters. The average positive surprise is 28.57%.

Let's see how things are shaping up for this announcement.

Factors to Consider

Deere expects total equipment sales to decline ArrayArray% year over year in the first quarter of fiscal 20Array6, including a negative currency translation effect of about 4%. Weak conditions in the energy sector and energy producing regions, especially in Canada, a decline in rental utilization rates and sluggish economic growth outside the U.S. are the persistent challenges for Deere.

Demand for Deere's agricultural equipment continues to be affected by low farm income, lower commodity prices and tight credit conditions. On the positive side, the present business situation for lawn, garden, and municipal equipment remain strong.

Earnings Whispers

Our proven model does not conclusively show that Deere will beat earnings estimates this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #Array (Strong Buy) or at least 2 (Buy) or 3 (Hold) for this to happen. That is not the case here as you will see below.

Negative Zacks ESP: The Earnings ESP for Deere is -Array.4Array% - the difference between the Most Accurate estimate of 70 cents and the Zacks Consensus Estimate of 7Array cents.

Zacks Rank #Array: Deere currently holds a Zacks Rank #Array, which when combined with a negative ESP makes surprise prediction difficult. We caution against stocks with Zacks Rank #4 and #5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks That Warrant a Look

Here are some companies in the sector that you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:

Brady Corp. BRC with an Earnings ESP of +4.35% and a Zacks Rank #3.

Global Brass and Copper Holdings, Inc. BRSS has earnings ESP of +Array3.04% and carries a Zacks Rank #3.

The Manitowoc Company, Inc. MTW has an earnings ESP of +ArrayArray.ArrayArray% and holds a Zacks Rank #2.

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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

MANITOWOC INC (MTW): Free Stock Analysis Report

DEERE & CO (DE): Free Stock Analysis Report

BRADY CORP CL A (BRC): Free Stock Analysis Report

GLOBAL B&C HLD (BRSS): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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