Can Caterpillar Outperform Deere After A 17% Fall?

Can Caterpillar Outperform Deere After A 17% Fall?

We believe that Caterpillar stock will likely outperform Deere's stock over the coming months.. Consumer spending is on a decline, and with the global economy feared to go into recession, it will likely have a significant impact on Deere's direct sales.. Deere's multiple appears high, compared to Caterpillar, and it is slightly higher than the low levels of 12.5x seen in 2015, implying that the stock could be vulnerable.. Overall, while both the stocks could continue to underperform the broader markets, it's likely that Caterpillar stock will outperform Deere going forward, which could see more correction to its P/E multiple through the current crisis.. CORONAVIRUS CRISIS : Since early February, Caterpillar stock has moved -17.2% compared to -15.7% for Deere. Caterpillar's stock has declined by about -17% since early February, compared to -16% decline for Deere, after the WHO declared a global health emergency relating to coronavirus.. Caterpillar's stock declined -26% while Deere's stock is down -23% since beginning of the year.. Historical EPS Growth: Caterpillar 2015-19 annualized adjusted EPS growth of 19.9% is 1.4x that of the 2015-19 Deere & Company annualized adjusted EPS growth rate of 14.6%.. Led by MIT engineers and Wall Street analysts, Trefis (through its