Salomon Smith Barney upgraded Deere (DE) and CNH Global (CNH) to buy from neutral.
Analyst David Raso said that on Friday, the House of Representatives Agricultural Committee passed favorable new farm bill. Though the final passage could be a year away, the bill suggests that new U.S. farm policy will stimulate farm equipment purchasing, which is likely even before final bill is passed. The bill causes farmers to increasingly view government payments similar to their own income, and in turn could enable 25% equipment demand rise, Raso said.
For DE, Raso raised his EPS estimates from $1.16 to $1.35 for 2001 and from $1.95 to $2.41 for 2002. He also hiked his stock price target from $38 to $55. For CNH, he raised his estimate for 2002 from a loss of $0.11 per share to earnings of $0.21 per share, and his $8 price target to $12.