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Outlook for Equipment Manufacturers set to Improve | KRVN Radio

Outlook for Equipment Manufacturers set to Improve

Outlook for Equipment Manufacturers set to Improve

A Wells Fargo analyst says the equipment manufacturing industry’s demand cycle should bottom out within the next 12 to 18 months, signaling a turnaround for the industry.

The turnaround would mean improved sales volumes and margins for Deere & Company’s fiscal 2017 and 2018, and improved outlooks for other manufacturers. The Wells Fargo data shows Deere and AGCO Corp. outperforming average market performance for the first time since 2012 and 2008, respectively. Wells Fargo predicts a $15 to $20 increase per-share value for Deere, based on the projected turnaround.

Such a recovery would bring much-needed relief for the company, according to Bloomberg, which has cut production amid a recession in the agricultural economy. When the Deere reports earnings next month, it is expected to post a third consecutive year of falling revenue and net income. The recent commodity market downturn, which has led to less farm income, has stalled purchasing of new equipment by farmers.

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