Goldman Sachs Fools Small Investors Again?

Goldman Sachs analysts were also particularly bullish on machinery stocks, writing that they presented “a particularly compelling opportunity in 2018 as the industry continues to emerge from a cycle trough.” Deere & Company (NYSE:DE) was identified as the top dog in this category. Goldman estimated an upside potential of 27% for the industrial giant, pointing at strong operating leverage and expanding profit margins. Furthermore the company was set to greatly benefit from its high R&D investment and capital spending.

So far, Deere & Company (NYSE:DE) has failed to live up to the hype. The stock has been losing value slowly but steadily and is currently down by 20% since Goldman issued its report. Investors have been driving the stock lower as the trade spat between US and China picked up steam. China announced plans to retaliate to US steel tariffs, by imposing tariffs on $50 billion worth of US imports, including a wide range of agricultural products. If farmers expect a decline in demand for their goods, they might postpone plans to renew their farming machinery and equipment.