Further upside in Deere may be limited as "lots of good news" is already priced into the stock, according to Bank of America . Analyst Ross Gilardi downgraded the stock to neutral from buy, citing fears of soaring fertilizer prices given the conflict in Ukraine and a "cautious" outlook on the farm economy amid ongoing macro conditions. "Deere's earnings have not peaked, but a lot of good news is priced into the stock, in our view," Gilardi wrote. "Our latest bi-annual farm equipment survey reads positively, but should have read even better, we believe. As expected, dealer commentary on pricing and inventory was bullish, but we detected a little more caution on order trends due to fertilizer shortages than anticipated." Russia and Ukraine are among some of the biggest exporters of inputs used in fertilizers . The downgrade came as the bank published its latest North American farm equipment dealer survey, which indicated order demand is flattening. Gilardi also noted that while a tight used equipment market bodes well for Deere, there's little room for additional growth. "The used equipment market remains extremely tight but didn't read tighter than six months ago, judging from the survey result," Gilardi wrote. "Tightness in the used market bodes extremely well for new equipment pricing. We are just not sure how much better it can get." Bank of America lowered its price target on Deere to $450, which implies an 11.5% upside from its previous close price. Shares of Deere have fared well since the start of the year, rising 17.7%. The stock dipped 3% premarket following the downgrade. — CNBC's Michael Bloom contributed to this report.
Equipment for sale at a John Deere dealer in Denver, May 14, 2015.
Rick Wilking | Reuters
Further upside in Deere may be limited as "lots of good news" is already priced into the stock, according to Bank of America.