Analyst Note| Dawit Woldemariam |
Deere posted impressive second-quarter results, as agriculture markets continue to show strength globally. We’ve increased our fair value estimate to $248 per share from $236 to reflect stronger end-market performance in the near term. In the quarter, equipment sales surged to $11 billion, up 34% year over year. Operating profit more than doubled to $2.1 billion compared with the same period a year ago, largely because of stronger volume and favorable sales mix (increased large agriculture equipment sales). Deere also benefited from strong pricing in the quarter, mostly due to adjustments made in mid-2020 in response to foreign currency headwinds.