Um, well, there's a very rational explanation. Read the conference call transcript. This quarter will again be soft in very key areas and the weakness is now structural. It is not going to change any time soon. A great short.
Rational Explanation? Please--this is the stock market...
OK: DE dropped during recent weeks due to weakness in construction equipment sales, as reported by CAT and DE. This drop in DE was an over-reaction because DE sells mostly agricultural equipment (about $35B) and some construction equipment ($6B).
DE down today is due to the suggestion by DE that sales may decrease 5% this quarter. Is DE is giving weak guidance so that they can beat later? Why? Maybe DE executives are getting stock options/shares based on the current price. Is DE Profit/Sales at a cyclical peak? No sign of a post-peak decline yet. In any case, DE projected higher profits for the year despite a possible 5% decline in sales this quarter.
$3.45B Profit over 393M Shares = $8.77 per share profit for this year.
FACT: DE predicts earnings of over $8 this year. The PE should be about 15, which puts DE at $120. DE at $82 is a buying opportunity.
DE stock price is down to $82 in contradiction to the fundamentals. This is a low point in the trading range. I expect DE to be closer to $92 by Thanksgiving, maybe sooner.
hard for me to believe they don't beat next quarter also, this is BS if you try to order a combine they are over a year out on delivery so with that type of backorder how can they guide down.
CAT misses their quarter - by a wide margin, and it goes up! This beats, and goes down?! I think that there is a "cleansing" taking place here, and that the fundamentals will drive this up. Maybe not today, but is will go up!