UPDATE: Jefferies Color on Deere & Company Downgrade

Jefferies, which downgraded shares of Deere & Company (NYSE: DE), is providing some color on the stock.

“We believe farm fundamentals remain strong, but DE appears to have limited additional volume and margin upside this cycle in its North American ag business,” Jefferies writes. “We lower our target multiples from peak to simply top half of cycle averages, consistent with a slowing growth outlook. Still elevated crop prices and growth in construction should help provide downside protection from current levels.

“We prefer AGCO Corporation (NYSE: AGCO) with much more exposure to Europe and where we see additional margin upside.”

Deere & Company closed Wednesday at $86.50.