Global Ag Equipment Demand Remains Robust as Deere Integrates Wirtgen; Maintain Our FVE
Deere grew its top line 29% year over year on a strong 34% rise equipment operations sales (12 percentage points from acquisition), and improved normalized net income 28%. While robust, results are in line with our annual expectations, thus we maintain our fair value estimate, as well as our wide moat rating. Our key takeaways from the quarter are: first, demand looks strong for 2018 and into 2019; and second, raw material costs are not crushing margins as some may have feared.Key risks to Deer...
Deere & Co. operates the following segments: Agriculture and Turf, which manufactures and distributes a line of agriculture and turf equipment and related service parts, including utility tractors, tractor loaders, combines, cotton pickers, cotton strippers, and sugarcane harvesters; Construction and Forestry, which manufactures and distributes a range of machines and service parts used in construction, earthmoving, road building, material handling and timber harvesting, including backhoe loaders and crawler dozers and loaders; and Financial Services, which finances sales and leases by the company's dealers of new and used agriculture and turf equipment and construction and forestry equipment.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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