Deere & Co.'s stock shed 1.6% in premarket trade Friday, after J.P. Morgan downgraded the company to its lowest underweight rating, citing concerns that the farm-equipment market could remain under pressure for the foreseeable future. Analyst Ann Duignan, who has rated Deere either neutral or underweight since July 2012, also cut her stock price target to $84, which is 8.9% below Thursday's closing price, from $90. Duignan said she recently spent time with various agriculture dealers, farmers and industry experts in the Midwest. "We believe it was clear from what we heard that the industry is currently in dire straits with the potential for a liquidity crunch for farmers into 2016," Duignan wrote in a note to clients. "Additionally, even the dealers acknowledged that there are far too many used high [horsepower] Deere tractors in inventory and this is likely to weigh on new tractor sales for the foreseeable future." The stock has gained 4.2% year to date through Thursday, outperforming the S&P 500's 3% advance.
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