Deere & Company (DE) Rising After Analyst Upgrade, Major Price Target Hike

Deere & Company (NYSE:DE). is the beneficiary of some analyst love today, after analysts at BMO Capital Markets upgraded the stock to ‘Outperform’ from ‘Market Perform’ and raised their price target on it to $96 from $70 per share. The analysts like how Deere has cut costs, trimmed inventory, and made itself more efficient. The efforts should set the stage for greater returns down the road when crop prices rebound. Deere & Company (NYSE:DE) shares are 2% higher on the news and have rallied by over 4% year-to-date after a major decline in the second-half of 2015. Shares of the company do look attractive given the company’s annual dividend yield of over 3%.

Deere & Company (NYSE:DE) was in 30 hedge funds’ portfolios at the end of March. DE investors should pay attention to an increase in enthusiasm from smart money lately. There were 28 hedge funds in our database with DE holdings at the end of the previous quarter. At the end of this article we will also compare DE to other stocks including Tyson Foods, Inc. (NYSE:TSN), Applied Materials, Inc. (NASDAQ:AMAT), and Synchrony Financial (NYSE:SYF) to get a better sense of its popularity.

We track prominent investors and hedge funds because our research has shown that historically their stock picks delivered superior risk-adjusted returns. This is especially true in the small-cap space. The 15 most popular small-cap stocks among a select group of investors delivered a monthly alpha of 80 basis points between 1999 and 2012 (see the details here).

When looking at the institutional investors followed by Insider Monkey, Warren Buffett’s Berkshire Hathaway has the number one position in Deere & Company (NYSE:DE), worth over $1.79 billion, corresponding to 1.4% of its total 13F portfolio. On Berkshire Hathaway’s heels is David Blood and Al Gore of Generation Investment Management, with a $466.6 million position; the fund has 5.7% of its 13F portfolio invested in the stock. Other members of the smart money that are bullish include Bob Peck and Andy Raab’s FPR Partners, Tom Gayner’s Markel Gayner Asset Management, and Ric Dillon’s Diamond Hill Capital.

On the next page we’ll run through some of the funds that were bullish on Deere during Q1 and see how the stock stacks up against others in popularity in its market cap range.