Sunday, January 4, 2015

Why Deere & Company (DE) Stock Could Rise

Normally, when a company forecasts a 15% drop in sales for the following year, investors' immediate reaction is negative, but the rules of investing logic with a highly cyclical stock like Deere & Company (NYSE: DE  ) are very different. Indeed, analysts at JPMorgan and Wells Fargo subsequently upgraded their ratings for the stock after the recent announcement. Essentially, the bullish case for Deere & Company rests on the idea that 2015 will see a cyclical trough in key crop prices, and therefore end demand for its agricultural machinery will pick up. If this happens, Deere could soar, as the best time to pick up a cyclical stock is before the rest of the market realizes the upswing is about to take place.


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