1. Deere & Company (NYSE:DE)
Number of Hedge Fund Holders: 57
Deere & Company (NYSE:DE) is an Illinois-based company that manufactures and distributes equipment worldwide. The company operates through four segments – Production and Precision Agriculture, Small Agriculture and Turf, Construction and Forestry, and Financial Services. On November 23, Deere & Company (NYSE:DE) posted a FQ4 GAAP EPS of $7.44 and a revenue of $14.35 billion, outperforming Wall Street estimates by $0.34 and $890 million, respectively. The company expects net income for FY2023 to be in the range of $8 billion to $8.5 billion. It is one of the agriculture stocks to invest in.
On December 19, Stifel analyst Stanley Elliott raised the price target on Deere & Company (NYSE:DE) to $477 from $475 and maintained a Buy rating on the shares. In his 2023 outlook note for his Machinery, Construction Materials, and Building Products coverage, the analyst stated that he expects “typical late-cycle trends” including weakness in housing but non-residential demand increasing. The analyst also forecasts the price/cost environment to improve.
According to Insider Monkey’s data, 57 hedge funds were long Deere & Company (NYSE:DE) at the end of the third quarter of 2022, compared to 54 funds in the last quarter. Bill & Melinda Gates Foundation Trust is the biggest stakeholder of the company, with approximately 4 million shares worth $1.30 billion.
Harding Loevner made the following comment about Deere & Company (NYSE:DE) in its Q3 2022 investor letter:
“Deere & Company (NYSE:DE), the world’s largest manufacturer of agricultural equipment, reported fiscal third-quarter growth in revenues and earnings of 22% and 16%, respectively. These results reaffirmed Deere’s pricing power, which enabled the company to overcome rising raw material costs and a host of supply chain challenges.
John Deere also suffered supply chain challenges. It could not complete some machines as it waited for parts, and higher shipping costs cut into its margins. In the third quarter, production recovered. Revenue for its connected services Precision Ag unit increased 43% year over year, thanks to rising unit sales and a 15% price bump. Deere is the world’s largest agricultural machinery manufacturer, with the largest customer base, the largest dealer network, and arguably the industry’s most advanced technology stack. Deere has also amassed the industry’s biggest agricultural database. These powerful competitive advantages should help Deere to raise its margins as it targets a 40% share of revenues by the end of the decade from less cyclical, recurring sources such as software and maintenance services.”
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