Analyst Actions: Deere, J.Crew, McCormick

From Standard & Poor's Equity Research

WACHOVIA DOWNGRADES DEERE TO MARKET PERFORM FROM OUTPERFORM

Wachovia analyst Andrew Casey tells S&P MarketScope that Deere & Co. (DE) fourth quarter EPS excluding non-recurring charges (adjusted EPS) was $0.93, missing both his $1.00 and consensus $0.99 estimates on lower-than-expected operating margin. He notes DE also provided lower-than-expected forward guidance.

Casey downgrades DE stock on the likelihood that it has limited upside potential from current levels in the intermediate term. He cuts $6.10 fiscal year 2009 (Octbober) adjusted EPS estimate to $4.65, $7.30 fiscal year 2010 to $4.50. He now sees flat fiscal year 2009 revenue, 8% lower revenue (year-over-year) in fiscal year 2010.

He cuts $55-$58 valuation range to $35-$38.

NEEDHAM CUTS J.CREW GROUP TO HOLD FROM BUY

Needham analyst Christine Chen says J.Crew Group (JCG) remains one of the few retailers offering differentiated and unique merchandise to customers and getting full price for fashion items.

But Chen says JCG has not been immune to the macro-economic environment, as it tends to sell more fashion and basics, the latter of which the customer is buying fewer of. She notes that both the direct and retail business has been more promotional thus far in the third quarter as JCG continues to clear through excess inventory.

She lowers $1.36 fiscal year 2009 (January) EPS estimate to $1.14 and $1.48 for fiscal year 2010 to $0.98.

BARCLAYS CAPITAL CUTS TARGETS FOR MCCORMICK, CONAGRA, SARA LEE

Barclays Capital analyst Andrew Lazar says he's downgrading the packaged foods sector to neutral from positive on lesser visibility for earnings growth in 2009, and valuation factors.

Lazar says, while pricing has already caught up with inflation and proven quite positive for the food group in 2008, the magnitude and timing of earnings growth in 2009 and beyond is less clear due to changes in the broader commodities markets that have occurred in recent years.

Along with the sector downgrade, he cuts price targets for McCormick & Co. (MKC) from $39 to $36, ConAgra Foods (CAG) from $22 to $18 and Sara Lee (SLE) from $13 to $12.