Deere & Company shares continue to trade in a bull market after better than expected Q1 results

Written by: Stanko Iliev
March 2, 2021
  • Deere & Company reported better than expected Q1 earnings and raised its quarterly dividend by 18%
  • Total revenue has increased by 23.3% in Q1
  • Deere & Company raised its 2021 guidance

Deere & Company (NYSE: DE) shares have advanced more than 33% since the beginning of the year, and the current share price stands around $350. Deere reported better than expected Q1 earnings in February, and the company raised its 2021 guidance.

Fundamental analysis: Deere & Company raised its 2021 guidance

Deere & Company shares have been moving in an uptrend since the beginning of the year, supported by the better than expected Q1 earnings. Deere reported Q1 results in February; total revenue has increased 23.3% Y/Y to $8.05B while Q1 GAAP EPS was $3.87 (beats by $1.70).

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Agriculture revenues rose 22% in Q1, small agriculture and turf revenue increased 27%, and construction and forestry sales gained 21%. It is also important to mention that a quarter’s net income to Jan. 31 has more than doubled to $1.22B.

“John Deere demonstrated strong execution in the first quarter, resulting in a 17% margin for the Equipment Operations. Ag fundamentals improved significantly throughout the first quarter, and the improved sentiment is reflected in the most recent status of our order books and early order programs,” said Brent Norwood, Manager of Deere & Company.

The company raised its 2021 guidance and announced that it expects a further increase of revenues while the net income should be around $4.6B-$5B, well above the $4.14B Wall Street consensus. Deere raised its quarterly dividend by 18% and declared a $0.90/quarterly share dividend last week.

Deere & Company could deliver strong shareholder value for many years to come, but shares of this company are a little expensive at the current price.

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Technical analysis: The positive trend remains intact

Deere & Company shares have been moving in an uptrend last several months, and for now, the positive trend remains intact.

Data source: tradingview.com

The important support levels are $325 and $300; $375 and $400 represent the resistance levels. If the price jumps above $375, it would be a signal to trade shares, and the next target could be around $400, but if the price falls below the $300 support level, it would be a firm “sell” signal.

Summary

Deere & Company reported better than expected Q1 earnings this February, and the company raised its quarterly dividend by 18%. Total revenue has increased by 23.3% in Q1 while the net income has more than doubled to $1.22B. Deere & Company shares remain in a bull market, the positive trend remains intact, but if the price falls below the $300 support level, it would be a firm “sell” signal. Deere could deliver strong shareholder value for many years to come, but shares of this company are a little expensive at the current price.