UPDATE: J.P. Morgan Downgrades Deere as U.S. Crop Fundamentals May Have Passed Peak

In a report published on Monday, J.P. Morgan analyst Ann Duignan downgraded Deere DE from Neutral to Underweight and lowered the price target on the company from $91 to $76.

In the report, J.P. Morgan stated, "We believe that farm cash receipts and incomes have passed peak on the back of two fundamental changes: 1) the ROW is now growing more crops, which will likely keep prices lower and 2) high land prices have driven rent costs up, and in an environment of lower crop prices, profit per acre is likely to fall significantly from here. Adding to these headwinds, tax incentives expire at year-end (these have supported new and used sales in recent years) and equipment costs are about to rise with higher emissions standards, suggesting that farmers trading frequently will have to pay more for a trade with less of a tax incentive. Putting all of this together, we see significantly greater downside risk to DE's earnings than upside and as a result we are downgrading the stock to UW."

Deere closed on Friday at $82.47.