Deere (DE) AI Stock Analysis

• Market Cap: $139.70B
• Dividend Yield: 1.24%
• Average Volume (3M): 1.25M
• Price to Earnings (P/E): 25.0
• Beta (1Y): 0.97
• Revenue Growth: -22.26%
• EPS Growth: -37.83%
• Country: US
• Employees: 35,200
• Sector: Industrials
• Sector Strength: 90
• Industry: Agricultural - Machinery
• EPS (TTM): 6.64
• Shares Outstanding: 270,827,060
• 10 Day Avg. Volume: 1,151,088
• 30 Day Avg. Volume: 1,248,282
• PEG Ratio: 0.44
• Price to Book (P/B): 4.97
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -1.53K
• Enterprise Value/Market Cap: 0.70
• Enterprise Value/Revenue: 0.50
• Enterprise Value/Gross Profit: 5.72
• Enterprise Value/Ebitda: 1.73
• 1Y Price Target: $557.29
• Price Target Upside: 7.82% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 15

• Rating: 72 Outperform
• Price Target: $578.00 ▲(11.83%Upside)

Deere's overall stock score is driven by strong financial performance and positive technical momentum, tempered by valuation concerns and challenges highlighted in the earnings call. The company's strategic investments in technology and manufacturing present long-term growth potential, but current market conditions and high debt levels pose risks.

Positive Factors

Inventory Management

Deere remains confident it can bring down used inventories given its success with used combines through increased dealer incentive funds.

Market Expansion

DE highlighted its in-region manufacturing, second-to-none dealer network and precision tech as key advantages it plans on leveraging to drive growth and market share gains in Brazil.

Technology Adoption

Tech adoption and connectivity are key pillars of DE’s Brazil growth strategy/value proposition, which was highlighted by the company’s commitment to delivering 2.5x the number of currently connected machines in Brazil.

Negative Factors

Inventory Challenges

Stubbornly high used inventory levels remain an obstacle, particularly in HHP tractors.

Price Flexibility

There is limited flexibility to raise prices this year to offset any tariff impacts due to the current order book length.

Tariff Impact

China announced retaliatory tariffs on US goods totaling $14B in annual sales, primarily targeting farm equipment.

Deere Business Overview & Revenue Model

Company Description

Deere & Company manufactures and distributes various equipment worldwide. The company operates through four segments: Production and Precision Agriculture, Small Agriculture and Turf, Construction and Forestry, and Financial Services. The Production and Precision Agriculture segment provides mid-size tractors, combines, cotton pickers and strippers, sugarcane harvesters, harvesting front-end equipment, sugarcane loaders, pull-behind scrapers, and tillage and seeding equipment, as well as application equipment, including sprayers and nutrient management, and soil preparation machinery for grain growers. The Small Agriculture and Turf segment offers utility tractors, and related loaders and attachments; turf and utility equipment, including riding lawn equipment, commercial mowing equipment, golf course equipment, and utility vehicles, as well as implements for mowing, tilling, snow and debris handling, aerating, residential, commercial, golf, and sports turf care applications; other outdoor power products; and hay and forage equipment. This segment also resells products from other manufacturers. It serves dairy and livestock producers, crop producers, and turf and utility customers. The Construction and Forestry segment provides a range of backhoe loaders, crawler dozers and loaders, four-wheel-drive loaders, excavators, motor graders, articulated dump trucks, landscape and skid-steer loaders, milling machines, pavers, compactors, rollers, crushers, screens, asphalt plants, log skidders, log feller bunchers, log loaders and forwarders, log harvesters, and attachments; and roadbuilding equipment. The Financial Services segment finances sales and leases agriculture and turf, and construction and forestry equipment. It also offers wholesale financing to dealers of the foregoing equipment; and extended equipment warranties, as well as finances retail revolving charge accounts. Deere & Company was founded in 1837 and is headquartered in Moline, Illinois.

How the Company Makes Money

Deere & Company generates revenue primarily through the sale of its agricultural, construction, and forestry machinery. The Agriculture and Turf segment is the largest contributor, driven by the demand for agricultural equipment and technology solutions that enhance farming efficiency and productivity. The Construction and Forestry segment supports revenue through the sale of heavy equipment used in construction, road building, and forestry operations. Additionally, Deere provides financial services, including leasing and financing options to customers purchasing equipment, which also contributes to its revenue streams. The company benefits from strong brand recognition, a global dealer network, and technological innovations that enhance equipment performance and integration.

Deere Financial Statement Overview

Summary

Deere's financial performance is solid, marked by strong profitability and efficient cash flow management. Despite facing revenue contraction, the company maintains healthy operating margins and a strong return on equity. However, high debt levels could pose risks if not managed effectively in the long term.

Income Statement

Deere shows strong profitability with a consistent gross profit margin of over 38% and a solid net profit margin of around 13% in the TTM (Trailing-Twelve-Months). However, revenue has declined over the past year, impacting overall growth prospects. The EBIT and EBITDA margins remain healthy, indicating operating efficiency.

Balance Sheet

The balance sheet indicates moderate leverage with a debt-to-equity ratio exceeding 0.96 in the TTM. Return on Equity stands at a strong 23.3%, reflecting effective use of equity to generate profits. However, the equity ratio of 22.8% suggests a reliance on debt financing, which poses a potential risk in economic downturns.

Cash Flow

Deere demonstrates robust cash flow management with a strong operating cash flow to net income ratio of 1.57, indicating efficient cash generation from operations. The free cash flow to net income ratio is 0.77, highlighting good conversion of earnings into free cash flow. Despite a slight decline in free cash flow growth, the company maintains healthy liquidity.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
44.46B	50.52B	60.25B	51.28B	43.03B	34.72B
	Gross Profit
17.15B	19.50B	22.31B	15.73B	13.71B	10.86B
	EBIT
9.39B	11.43B	14.59B	9.03B	7.66B	4.37B
	EBITDA
12.61B	14.67B	17.48B	12.08B	10.64B	7.25B
	Net Income Common Stockholders
5.65B	7.10B	10.17B	7.13B	5.96B	2.75B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
9.26B	8.48B	8.40B	5.51B	8.74B	7.71B
	Total Assets
106.30B	107.32B	104.09B	90.03B	84.11B	75.09B
	Total Debt
23.47B	65.46B	63.69B	52.20B	48.73B	46.30B
	Net Debt
23.47B	58.14B	56.23B	47.43B	40.71B	39.23B
	Total Liabilities
81.92B	84.39B	82.20B	69.67B	65.68B	62.15B
	Stockholders Equity
24.29B	22.84B	21.79B	20.26B	18.43B	12.94B
Cash Flow		Free Cash Flow
4.33B	4.43B	4.12B	911.00M	5.15B	4.83B
	Operating Cash Flow
8.86B	9.23B	8.59B	4.70B	7.73B	7.48B
	Investing Cash Flow
-4.01B	-6.46B	-8.75B	-8.48B	-5.75B	-3.32B
	Financing Cash Flow
-2.38B	-2.72B	2.81B	826.00M	-1.08B	-980.00M

Deere Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 516.86
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE, the sentiment is Positive. The current price of 516.86 is above the 20-day moving average (MA) of 515.32, above the 50-day MA of 484.12, and above the 200-day MA of 445.96, indicating a bullish trend. The MACD of 8.06 indicates Positive momentum. The RSI at 58.30 is Neutral, neither overbought nor oversold. The STOCH value of 67.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DE.

Deere Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CAT	78 Outperform	$168.64B	17.47	55.67%	1.55%	-5.58%	-7.37%
OSK	77 Outperform	$7.18B	11.91	15.24%	1.83%	5.95%	-10.59%
PCAR	75 Outperform	$49.28B	14.24	19.90%	1.41%	-8.64%	-31.57%
DE	72 Outperform	$139.70B	24.95	24.07%	1.24%	-22.26%	-37.83%
CNH	66 Neutral	$16.09B	15.50	13.26%	1.94%	-21.99%	-52.11%
Sector *	66 Neutral	$4.52B	12.34	5.41%	3.62%	4.15%	-12.18%
AGCO	55 Neutral	$7.66B	46.40	-13.60%	1.13%	-23.02%	-152.78%

Deere Corporate Events

Deere Appoints PACCAR CEO to Board of Directors

Deere & Company has appointed R. Preston Feight, CEO of PACCAR Inc, to its board of directors, enhancing its leadership with his extensive experience in engineering and strategic innovation. Feight is known for driving advancements in technology and manufacturing at PACCAR, positioning it as a leader in advanced powertrains and connectivity. His appointment aligns with Deere’s Smart Industrial Operating Model, aiming to boost productivity and sustainability.