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John Deere looks to increase its holdings in construction industry

Tuesday, August 21, 2012

Emerging market sales could help to support this growth, and investors are likely to fall in line with the iconic brand.
Emerging market sales could help to support this growth, and investors are likely to fall in line with the iconic brand.

Though people who have used John Deere equipment are often found in the fields of America's farms, the agricultural sector is not the only industry that the company operates in.

According to Reuters, the firm is looking to up the ante in the construction industry, as it is looking to challenge Caterpillar and Komatsu in order to climb to the top of the sector.

As the company looks at adjusting its business model to support growing demand for construction equipment, it has noted that bulldozers, front-end loaders and dump trucks could be one of the keys for its expansion in the coming years.

Emerging market sales could help to support this growth, and investors are likely to fall in line with the iconic brand.

"Construction sales will definitely help Deere grow its business, even if their main focus is agriculture," Gary Bradshaw, of Hodges Capital, told the news outlet.

This sentiment was mirrored by other industry experts, as one noted that agriculture will remain the focus, but John Deere will expand in other ways.

"Agriculture will likely remain three-quarters of Deere's business in the long run," said Morningstar analyst Adam Fleck. "But construction is more and more an important part of Deere's portfolio."

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