July 17 (Bloomberg) -- Deere & Co., the largest maker of agricultural equipment, fell after JPMorgan Chase & Co. downgraded the shares on concern the U.S. drought may slow sales of tractors and combines to farmers.
Deere dropped 1.1 percent to $75.94 in New York. Earlier the Moline, Illinois-based company fell as much as 3.4 percent, the biggest intraday decline since June 1.
The worst drought in a generation has cut crop production across 80 percent of the Midwest, Ann Duignan, a New York-based analyst at JPMorgan said today in a report. Farmers are putting off purchases until next season to save cash after four years of above-average investments in equipment.
“We expect weaker sales from August into next spring, at the earliest, as farmers deal with low yields this year,” Duignan said in the report.
She cut Deere to underweight, meaning the shares are expected to underperform the average of others in her coverage in the next 6 to 12 months, from overweight, meaning they should outperform others, and reduced the price target to $78 from $98.
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