Deere FQ4 earnings preview: One other sturdy quarter forward with ag sector tailwinds?

Deere (NYSE:DE) is scheduled to announce FQ4 earnings outcomes on Wednesday, November twenty third, earlier than market open.

The consensus EPS Estimate is $7.11 (+72.6% Y/Y) and the consensus Income Estimate is $13.46B (+30.9% Y/Y).

The Illinois-based industrial firm’s inventory has considerably outperformed in 2022, rising over 18% in distinction to a 17% decline for the S&P 500.

Shortly earlier than the outcomes, the corporate mentioned it will reshore manufacture of harvesters to Louisiana from China. It additionally acquired a constructive outlook on its credit standing from Moody’s primarily based upon “sturdy worth realization”.

Deere (DE) missed FQ3 earnings expectations and lowered the highest finish of steering for full-year web earnings, citing “greater prices and manufacturing inefficiencies pushed by the tough provide chain scenario”.

Over the past 3 months, EPS estimates have seen 4 upward revisions and 5 downward. Income estimates have seen 1 upward revision and three downward.

Analysts at Morgan Stanley declare they see a brighter future than many traders forecast for agricultural equipment makers akin to Deere (DE) with three missed drivers of a “extra sturdy progress path”.

SA contributor Leo Nelissen additionally forecasts pricing and inflation might grow to be tailwinds in 2023 in a really bullish evaluation of the inventory forward of the FQ4 outcomes.

Wholesome agriculture demand will proceed to be a serious driver for Deere’s (DE) upcoming earnings report, however margins will probably be a key watch merchandise after an surprising miss in FQ3 based on Stephen Simpson.

Over the past 1 yr, DE has crushed EPS estimates 100% of the time and has crushed income estimates 75% of the time.