NEW YORK ( TheStreet) -- Last week, Deere & Co. ( DE) , the world's largest maker of farm equipment, reported that its fiscal third-quarter profit fell by 15%, and it cut its profit forecast for the year. A day later, it announced that it's laying off more than 600 workers at four factories in the U.S.
The shares fell about 2% after the earnings report, but have since rebounded, trading Tuesday morning at $86.12, up about 1.8% from Wednesday close. The stock is down 5.7% year to date, compared with a 6.9% gain for the Standard & Poor's 500 Index.
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Deere's stock trades at 9.4 times this year's estimated earnings, compared with a forward price-to-earnings ratio of 18.5 for the S&P 500. So the bad news may already be priced into Deere's stock, meaning the shares may be on their way to becoming a relative bargain.
There is plenty of bad news. The company has been hurt by a drop in corn prices in the U.S., its largest market. With lower corn prices, farmers are less likely to buy new equipment.
Deere forecasts that sales of agricultural and turf equipment -- the company's largest segment, accounting for more than 80% of its overall operating profit -- will drop 10% in fiscal 2014, which is 3 percentage points lower than its previous estimate. The fall will be across all regions, with the sharpest drop in South America.