The firm also cut its full year 2015 earnings estimate to $6.50 per share from $7.40 per share, and its full year 2016 estimates to $6 per share from $6.50 per share.
BMO said it reduced its numbers on the company, which manufactures agricultural, construction, forestry machinery and related products, based on its lower expectation for domestic agricultural demand.STOCKS TO BUY: TheStreet Quant Ratings has identified a handful of stocks that can potentially TRIPLE in the next 12 months. Learn more.
"We took a close look at the assumptions in our model and concluded our prior forecasts were a bit optimistic," BMO said.
With Deere set to report its 2014 fourth quarter earnings on Nov. 26, the firm said it had originally forecast for revenue deterioration from North American equipment sales of 15%, but now believes it will be closer to 20%.
Separately, TheStreet Ratings team rates DEERE & CO as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:
"We rate DEERE & CO (DE) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, increase in stock price during the past year and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- DE, with its decline in revenue, slightly underperformed the industry average of 2.4%. Since the same quarter one year prior, revenues slightly dropped by 5.1%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. Compared to other companies in the Machinery industry and the overall market, DEERE & CO's return on equity significantly exceeds that of both the industry average and the S&P 500.
- DEERE & CO's earnings per share declined by 9.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, DEERE & CO increased its bottom line by earning $9.08 versus $7.64 in the prior year. For the next year, the market is expecting a contraction of 7.8% in earnings ($8.38 versus $9.08).
- You can view the full analysis from the report here: DE Ratings Report