JPMorgan Chase & Co. downgrades Deere & Company stock

JPMorgan downgrades Deere & Company to Underweight from Neutral, reducing the stock price target from $84 from $90, quoting  liquidity crunch for farmers as the major reason.

JP Morgan revealed the meeting details with several participants of industry including farmers, dealers and industry experts. The sell side company demoted Deere & Company to Underweight from Neutral mentioning difficult times for the industry and said that the equipment manufacturer of agricultural industry is expected to get impacted sharply. The firm also reduces its stock price target to $84 from previous $90.

While talking about the situation of farmers’, Ann Duignan analyst at JP Morgan said, “We believe it was clear from what we heard that the industry is currently in dire straits with the potential for a liquidity crunch for farmers into 2016.” Moreover she said that the dealers also acknowledged that there are a lot of used HP Deere tractors in company’s inventory, and this is expected to impact the sales of new tractors in the coming years.

Ms. Duignan also revised her earnings guidance for Deer &Co. as they believe that the agriculture industry will be under pressure in the coming year. She cut her fiscal year 2015 earnings estimate to $5.2 from $5.28 per share. She also reduced her fiscal year 2016 earnings estimate to $4.2 from $5.27 per share.

Recently, the company also noted that the United States Department of Agriculture’s grain stock, total 7.75 billion bushels of US corn stock increased by 11% in year over year basis. Majority of farmers kept the last year’s crop, hopeful that the price will reach a new and attractive level, but as they shrub their corn in the perfect condition, the mixture of these fresh crops with old burdensome stocks is expected to decrease the prices.

As per Tractorhouse.com, there are over 6 thousand Deere, 175 HP+ tractors used less than 4 years available in North America for sale. This shows roughly 60% of altogether used 175 HP+ tractors. The company applies 20 times multiple on its expected fiscal year 2016 earnings in order to reach $84 of new stock price target.

As per the survey conducted by Bloomberg, Out of 23 analysts, 5 gave Buy rating, 10 of them assigned Hold rating, while remaining 8 recommended Sell rating to the stock of the company. The twelve month consensus mid-point price target stood at $85.33 that shows a downside potential of almost 4.3% as compared to current stock price of the company.

The stock price was down 3.34% to $89.13 at market close on Friday May 15.

Bed Bath & Beyond Rating Update

Morningstar, an acclaimed investment research and management firm has given “BBB+” credit rating and a two star rating to Bed Bath & Beyond. The BBB+ rating means that the company has a reasonable default risk.

Several analysts have been covering stocks of Bed Bath & Beyond lately. On Monday in a research note, Oppenheimer analyst promoted shares of the company to an outperform rating from a market performance rating and increased their target price to $85 from previous $69 of the company.

Zacks analysts restated its “neutral” rating on the stock the stock of the company and raised a target price of $77 on Wednesday 21^st January. A Canadian bank and financial service company; Canaccord Genuity Group analysts restated a rating of Buy and set a new target price of $88 on stock of Bed Bath & Beyond last month. Lastly, Standard and Poor’s financial services LLP demoted the shares of the company to a Hold and set a target price of $80 on the stock in a research note last month.

Out of 21 equity research analyst, four have given it a sell rating; eleven have rated the stock as Hold and remaining six have issued a buy rating including one strong buy rating. The retail company's stock currently on an average has a rating of Hold and average price target of $72.62.

Bed Bath & Beyond announced its last quarter earnings last month on 8^th January. The company posted earnings of $1.23 per share for the quarter covering from October to December surpassing the analyst’s expectation of $1.19 per Share. The Company declared revenue of $2.94 billion which was up by 2.7% from the similar quarter previous year. For the fiscal year, analysts expect BBBY to post annual earnings per share of $5.05.

Total of 13 analysts has given Bed Bath & Beyond stock a short-term target price of $78.77. The stock price is likely to fluctuate from average short term price. The higher approximation of the company's price target is $90 and lower is $55.

Bed Bath and beyond (NASDAQ:BBBY)stock price is down by 0.40%, with stock price $76.58 at market close on Friday 23^rd February, with 30-days mean volume of 2.83 million shares. The United States domestic merchandise retail store company has a 52-week low of $54.96, and a 52-week high of $79.64 with market cap of $14.29 billion and price to earnings ratio of 15.56.