Farm equipment maker John Deere is notching new 52-week highs this morning following an upgrade of the stock from Morgan Stanley, helping to lead the industrials sector higher. It's up 2.1%.
While Deere is a venerable U.S. brand, Morgan Stanley's call hinges to a large extent on the Brazilian market, which they believe has the potential to help offset any slowdown in stateside agriculture. "A 10% US drop into 2010 could be offset by a Brazil market rebound plus existing share gains for Deere in Brazil," Morgan Stanley wrote. "We see this as a rare opportunity where consensus is too conservative on both cyclical and secular factors, making [Deere] risk reward highly favorable vs other machinery stocks." Deere shares up 4.3%.
view original article