Deere (DE) AI Stock Analysis

• Market Cap: $144.25B
• Dividend Yield: 1.16%
• Average Volume (3M): 1.49M
• Price to Earnings (P/E): 25.7
• Beta (1Y): 0.96
• Revenue Growth: -22.25%
• EPS Growth: -37.83%
• Country: US
• Employees: 35,200
• Sector: Industrials
• Sector Strength: 90
• Industry: Agricultural - Machinery
• EPS (TTM): 6.64
• Shares Outstanding: 271,413,940
• 10 Day Avg. Volume: 1,515,940
• 30 Day Avg. Volume: 1,486,703
• PEG Ratio: -1.71
• Price to Book (P/B): 5.62
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 29.86
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $533.23
• Price Target Upside: 0.33% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 15

Deere's overall stock score reflects strong financial performance and operational efficiency. The stock benefits from positive technical trends, although it might be overbought. Valuation metrics suggest a potential overvaluation, and recent earnings call insights highlight challenges with declining sales and tariff impacts.

Positive Factors

Operating Cash Flow

Deere continues to generate strong operating cash flow with the forecast unchanged at $4.5B–$5.5B, and share repurchase is expected to improve.

Product Inventory

Significant progress in new product inventory levels positions Deere & Company well to align production with retail sales in upcoming periods.

Sales Performance

Deere’s stock closed up 4% after exceeding consensus EPS by 19% on better sales and margin performance in Production & Precision Ag and in Small Ag & Turf.

Negative Factors

Retail Sales

North America retail sales are likely to worsen at least through F1H25, leading to another year of negative earnings revision in 2025.

Tariffs Impact

Deere & Company expects to incur a pre-tax headwind of $500 million related to tariff cost absorption in FY25.

Valuation Concerns

Valuation will be tested as DE approaches the FY26 guidance season due to current near-all-time-high valuation.

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 machinery and equipment in the Agriculture and Turf and Construction and Forestry segments. These segments account for the majority of its income, driven by the sale of tractors, combines, harvesters, and other agricultural equipment, as well as construction and forestry machinery. The Financial Services segment contributes to the company's earnings by providing financing options for equipment purchases, which facilitates customer acquisitions and loyalty. Additionally, Deere benefits from aftermarket services, including parts and maintenance, which provide a steady revenue stream. The company's earnings are further supported by its focus on innovation, such as precision agriculture technologies, and strategic partnerships that enhance its product offerings and market reach.

Deere Financial Statement Overview

Summary

Deere presents a strong financial profile with robust profitability and operational efficiency. The company's income statement reveals solid margins and stable revenue, while the balance sheet shows moderate leverage and impressive ROE, although equity reliance could be improved. Cash flows are healthy, despite recent fluctuations in free cash flow growth, indicating sound management.

Income Statement

Deere shows strong income statement performance with a solid Gross Profit Margin of 36.85% in TTM (Trailing-Twelve-Months). The Net Profit Margin is healthy at 13.60%, reflecting efficient cost management. Revenue growth is positive, though recent growth is moderate, indicating stability in sales. EBIT and EBITDA margins of 21% and 24.11% respectively, suggest robust operational efficiency.

Balance Sheet

The balance sheet indicates a stable financial position with a Debt-to-Equity Ratio of 0.57 in TTM, suggesting moderate leverage. The Return on Equity is impressive at 27.65%, showcasing effective use of equity capital. However, the Equity Ratio of 21.80% indicates a higher reliance on debt, which might pose a risk if not managed carefully.

Cash Flow

Cash flow analysis reveals a strong Free Cash Flow to Net Income Ratio of 0.75, indicating good cash generation from operations. Operating Cash Flow to Net Income Ratio is 1.45, suggesting solid cash conversion. However, the Free Cash Flow Growth Rate is negative, which could reflect recent capital expenditures or other investments.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
46.93B	50.52B	60.25B	51.28B	43.03B	34.72B
	Gross Profit
18.07B	19.50B	22.31B	15.73B	13.71B	10.86B
	EBIT
10.23B	11.43B	14.59B	9.03B	7.66B	4.37B
	EBITDA
13.41B	14.67B	17.48B	12.08B	10.64B	7.25B
	Net Income Common Stockholders
6.22B	7.10B	10.17B	7.13B	5.96B	2.75B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
4.02B	8.48B	8.40B	5.51B	8.74B	7.71B
	Total Assets
43.27B	107.32B	104.09B	90.03B	84.11B	75.09B
	Total Debt
24.35B	65.46B	63.69B	51.90B	48.41B	46.00B
	Net Debt
20.56B	58.14B	56.23B	47.13B	40.40B	38.93B
	Total Liabilities
36.96B	84.39B	82.20B	69.67B	65.68B	62.15B
	Stockholders Equity
6.29B	22.84B	21.79B	20.26B	18.43B	12.94B
Cash Flow		Free Cash Flow
4.23B	4.43B	4.12B	911.00M	5.15B	4.83B
	Operating Cash Flow
9.01B	9.23B	8.59B	4.70B	7.73B	7.48B
	Investing Cash Flow
-6.26B	-6.46B	-8.75B	-8.48B	-5.75B	-3.32B
	Financing Cash Flow
-995.00M	-2.72B	2.81B	826.00M	-1.08B	-980.00M

Deere Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 531.48
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• 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 531.48 is above the 20-day moving average (MA) of 478.68, above the 50-day MA of 470.57, and above the 200-day MA of 431.78, indicating a bullish trend. The MACD of 13.82 indicates Negative momentum. The RSI at 75.16 is Negative, neither overbought nor oversold. The STOCH value of 78.37 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
PCAR	77 Outperform	$50.77B	14.67	19.90%	1.27%	-8.64%	-31.57%
OSK	76 Outperform	$6.58B	10.91	15.24%	1.85%	5.95%	-10.59%
DE	75 Outperform	$144.25B	25.71	24.07%	1.16%	-22.25%	-37.83%
CAT	73 Outperform	$166.29B	17.23	55.67%	1.59%	-5.58%	-7.37%
CNH	66 Neutral	$17.08B	16.45	13.26%	3.44%	-21.99%	-52.11%
Sector *	64 Neutral	$4.42B	11.99	5.16%	249.23%	4.02%	-11.68%
AGCO	55 Neutral	$8.09B	46.40	-13.60%	1.07%	-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.