An improved 2010 revenue forecast prompted an analyst to slightly increase his profit estimate for Deere & Co. Friday, although he warned that the farm equipment manufacturer could be hurt by reduced demand and the weak dollar.
R.W. Baird analyst Robert F. McCarthy Jr. increased his price target for the Moline, Ill., company to $53 from $44.
He raised his fiscal 2010 estimate to $2 per share from $1.95, "largely reflecting a more robust revenue forecast" and expectations for modestly lower operating margins in Deere's construction and forestry business.
Analysts surveyed by Thomson Reuters expect Deere to earn $2.63 per share for fiscal 2010.
Deere said Wednesday that sales of tractors, combines and other agricultural mainstays slumped in the fiscal fourth quarter. It ended fiscal 2009 with a profit of nearly $874 million but lost $223 million in the fourth quarter due to big charges related in part to pension costs and job cuts.
McCarthy introduced a fiscal 2011 estimate of $3 per share. Analysts expect $3.60 per share, according to a survey by Thomson Reuters. He said in a client note he assumes "moderate recoveries" in Deere's agriculture and turf and construction and forestry businesses.
McCarthy maintained a "Neutral" rating.
Shares fell $1.60, or about 3 percent, to $52.10 in premarket trading.