Deere stock price gained momentum over the last couple of weeks amid improving demand for agricultural products. The reports are suggesting that equipment sellers including Deere are receiving solid pricing while their dealer inventories are in good shape.

Both factors are pointing strong future fundamentals and strengthening market for the agricultural products.

The market analysts have also raised their price target for Deere. Jefferies has provided a street high target of $200 for Deere stock compared to the previous target of $165.

The firm has also increased earnings outlook for the next two years. They now expect Deere to report 2021 earnings in the range of $9.25 per share and expects earnings to enlarge to $11 a share in 2022.

DE Deere & Company daily Stock Chart

“Our web scrape shows list prices for large tractors up 2.5% Y/Y in July, with the number of listings falling 13.6%,” Volkmann writes; large equipment in North American accounts comprise ~25% of Deere sales vs. 10% for peer Agco,” Jefferies said.

Baird has also upped the price target for Deere to $189. The firm expects that small agriculture consumers are generating robust sales growth for agricultural products despite pandemic. They expect strong results for the second half of the year.

The firm also claims that demand from large agriculture producers also remain strong, which is providing substantial support to Deere as it is among the largest seller of agricultural products.

Deere has generated first-quarter earnings per share of $2.11 compared to $3.52 per share a year ago. Its first-quarter worldwide net sales plunged 18% year over year to $9.253bn. They have previously dropped their outlook for the rest of the year. They expect fiscal 2020 net income in the range of $2bn while sales are likely to drop in a high single-digit rate.