Morgan Stanley (NYSE:MS) Increases Deere (NYSE:DE) Price Target

Morgan Stanley (NYSE:MS) upped the price target of Deere & Co. (NYSE:DE) Thursday to $75 a share, saying consolidation in the industry is underestimated.

Morgan Stanley's Alexander Vecchio, Robert Wertheimer and Joseph O'Dea wrote in a note, "In our view, consensus underestimates the impact of consolidation in the US farmer and DE's strong position in the construction market, which should recover even in a weak economy. The company has executed extremely well through the downturn in our view. 2Q/3Q [agriculture] margins at record levels, and high end of historical range even adjusting for 2 points of [positive] mix."

The idea the construction equipment market will do well no matter if the economy is in a downturn isn't too convincing to me.

I would agree with that if they're including the mining industry equipment market, where strong earnings for many could result in increased investment.