Deere and Co is about to release earnings. Ponder this Bear Case Scenario.
Many bulls say the finance unit takes big down payments so the financing is right. That may be so; but that’s hardly a Bull Case Scenario.
Deere is one-third exposed to home construction which remains a very dubious proposition. Home construction in the US of A will be weak for the foreseeable future. Get used to it.
Weak economic conditions in Europe and North America will lead to declines in revenue and profitability. the west is still fragile and will remain so for the foreseeable future.
Corn based ethanol has a limited shelf live and will soon arrive at its beat before date. Farmers will stop growing corn and will stop buying Deere.
George Gutowski writes from a caveat emptor perspective.