KANSAS CITY (B)--Although shares of Deere & Co. have fared better than some of its competitors' shares lately, the stock lost nearly 8% of its value March 2 in a move that analysts said related to an investor shift away from such companies.
Deere's stock fell as low as 34-1/16 in March 2 trading, down almost 8% from March 1 close of 37 in a move analysts said is likely the result of the market "catching up" with the stock, said CIBC World Markets Corp. analyst Charles Harris.
"Deere as a stock has been acting a little bit better than everybody else," Harris said and thus has more to lose.
Analysts noted that companies such as construction equipment giant Caterpillar Inc. sank to a new 52-week low of 34 3/16 in Thursday morning trading. Shares of other farm equipment makers have also been sluggish for some time amid slumping retail sales to U.S. farmers facing low commodity prices.
Near midsession, Deere stock was trading at 34 1/4, down 2 3/4 on the day.
Analysts said the stock decline is likely unrelated to Deere's announcement early Thursday that it will buy an 80% stake in Shanghai GE Construction Equipment Engineering Co., Ltd.
Deere said it plans to change the name of the joint venture company based in Shanghai, China to Deere Rental Equipment Co., Ltd. and change its emphasis from crane rentals to construction machinery rentals.
The world's largest farm equipment maker said the deal needs Chinese regulatory approval and expects the process to take 60 to 90 days. Terms of the deal were not disclosed.