Diamonds and Dogs

11/21/18

Deere (DE) running strong. Deere is trading up 3% following earnings this morning. Deere actually missed earnings estimates as sales rose 17.6% to $8.34 billion. Currently, Deere is struggling with the strong dollar, the US/China trade war and rising interest rates. Looking forward, Deere is projecting better than expected earnings and sales for 2019. Deere is seeing strong demand for equipment replacement activity. Deere is also expecting continued growth in the U.S. housing market, along with economic growth worldwide, which would help to drive revenue at its construction unit.

Best Buy (BBY) down 3% on an upgrade. As one of the few stocks higher yesterday following earnings, Best Buy is one of the few stocks lower today not far from a 52 week low. The upgrade was actually the analyst going from an Underperform to a Neutral while also lowering his price target by $5. Investors and analysts are still concerned Amazon will keep the pressure on Best Buy to lower costs. The company has been cutting back on underperforming stores and leveraging shop-in-shops, expanding relevant categories, improving pricing, growing e-commerce. The services segment is still in the early stages, which could weigh on profits in the next year.