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Deere climbs after Bernstein rating boost
Bloomberg News
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Published: 1/8/2009 11:12 AM

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Deere & Co., the world's largest maker of farm equipment, rose to the highest price since October after Sanford C. Bernstein & Co. boosted its rating on the shares to "outperform" from "market perform," citing strength in agricultural markets.

Deere gained 86 cents, or 2 percent, to $43.51 at 10:27 a.m. in New York Stock Exchange composite trading and earlier rose 4.9 percent to $44.75, the highest since Oct. 1. Moline-based Deere dropped 59 percent last year.

Deere will benefit from higher equipment prices this year, aided by President-elect Barack Obama's support for corn-based ethanol, the ability of U.S. farmers to obtain credit, and pricing pressure from China on soybeans and corn, Bernstein analyst Daniel Dowd wrote in a note to clients dated today.

"The agriculture end market will be stronger for longer than investors currently believe because while demand will grow slowly, supply is likely to get constrained," Dowd wrote.

Deere will benefit because it has increased capacity to fill orders, Dowd said. The analyst also raised his share-price estimate for Deere to $60 from $38.