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Deere (DE)
NYSE:DE
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Deere
(NYSE:DE)
Rating:72Outperform
Price Target:
$578.00
â–²(13.42%Upside)
Positive Factors
Market Expansion
Deere is celebrating its 25th year in Brazil and has gained significant market share, particularly after localizing production over the last decade.
Technology Advancements
Deere's leading position in ag tech will deliver transformational value to farmers, and the company will share in a meaningful part of that upside.
Negative Factors
Interest Rates
High interest rates continue to be an issue in the farm sector, with little relief expected in government programs.
Tariffs
China announced retaliatory tariffs on US goods totaling $14B in annual sales, primarily targeting farm equipment.
Deere (DE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$138.01B
Dividend Yield1.27%
Average Volume (3M)1.19M
Price to Earnings (P/E)24.7
Beta (1Y)0.97
Revenue Growth-22.26%
EPS Growth-37.83%
CountryUS
Employees35,200
SectorIndustrials
Sector Strength85
IndustryAgricultural - Machinery
Share Statistics
EPS (TTM)6.64
Shares Outstanding270,827,060
10 Day Avg. Volume1,074,869
30 Day Avg. Volume1,193,891
Financial Highlights & Ratios
PEG Ratio0.44
Price to Book (P/B)4.97
Price to Sales (P/S)0.00
P/FCF Ratio-1.53K
Enterprise Value/Market Cap0.71
Enterprise Value/Revenue0.50
Enterprise Value/Gross Profit5.72
Enterprise Value/Ebitda1.73
Forecast
1Y Price Target
$554.13Price Target Upside8.74% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering16
Deere Business Overview & Revenue Model
Company DescriptionDeere & Company (DE), commonly known as John Deere, is a global leader in the manufacturing of agricultural, construction, and forestry machinery. The company operates through three primary segments: Agriculture and Turf, Construction and Forestry, and Financial Services. Deere's core products include a wide range of equipment such as tractors, combine harvesters, cotton pickers, and lawn care equipment, as well as advanced technology solutions for precision agriculture and construction management.
How the Company Makes MoneyDeere & 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 Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
Main Street Data
Main Street DataDeere Earnings Call Summary
Earnings Call Date:May 15, 2025
(Q2-2025)
| % Change Since: 2.43%|
Next Earnings Date:Aug 15, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mixed sentiment. While Deere exhibited strong operational performance and significant strategic investments in technology and U.S. manufacturing, the company faced substantial challenges with declining sales, tariff impacts, and global market uncertainties.Q2-2025 Updates
Positive Updates
Exceptional Execution Amidst Market Challenges
Deere delivered a better-than-expected second quarter with an 18.8% margin for equipment operations, demonstrating exceptional execution despite challenging market dynamics.
Strong Operational Performance
Net sales increased sequentially, and margins were down year-over-year but grew sequentially to just under 19% for the quarter, showcasing strong operational performance.
Significant Investment in U.S. Manufacturing
John Deere plans to invest $20 billion in the U.S. over the next decade, focusing on new product development, cutting-edge technologies, and advanced manufacturing.
Expansion of Precision Technology
The Precision Essentials package saw strong adoption, with nearly 10,000 orders globally in the first half of fiscal 2025, exceeding the entire fiscal 2024 order count in just six months.
Continued Growth in Precision Ag Solutions
In 2025, over 1,000 new orders for See & Spray were received, increasing the population of machines significantly and demonstrating greater utilization and investment by customers.
Negative Updates
Decline in Net Sales and Revenues
Net sales and revenues were down 16% to $12.763 billion, with net sales for the equipment operations down 18% to $11.171 billion compared to the same quarter last year.
Impact of Tariffs
The company faced approximately $100 million in incremental tariff headwinds during the quarter, with a forecasted pre-tax tariff impact of over $500 million for fiscal year 2025.
Challenges in Construction and Forestry Segment
Net sales for the Construction and Forestry segment declined roughly 23% year-over-year to $2.947 billion due to lower shipment volumes and an unfavorable sales mix.
Global Uncertainty Affecting Customer Sentiment
Global uncertainty continues to weigh on customer sentiment across end markets, impacting order activity for both construction and compact construction equipment.
Company Guidance
During Deere & Company's second quarter earnings call for fiscal year 2025, several key metrics were highlighted. The company reported net sales and revenues down 16% to $12.763 billion, with equipment operations net sales down 18% to $11.171 billion. Despite these declines, Deere achieved an operating margin of 18.8% for equipment operations, attributed to better-than-expected sales and favorable production costs. Net income attributable to Deere was $1.804 billion or $6.64 per diluted share. In the production and precision Ag segment, net sales decreased by 21% to $5.23 billion, resulting in a 22% operating margin. For the small Ag and Turf segment, net sales dropped 6% to $2.994 billion, with a 19.2% operating margin. The construction and forestry segment saw a 23% decline in net sales to $2.947 billion, with a 12.9% operating margin. The company also faced $100 million in tariff headwinds during the quarter and anticipates a total tariff impact of over $500 million for the fiscal year. Despite these challenges, Deere remains committed to investing in technology and manufacturing, with plans to invest $20 billion in the U.S. over the next decade.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.80
Positive
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.75
Positive
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.78
Positive
| 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
Neutral
509.59
Price Trends
484.90
Positive
480.45
Positive
446.61
Positive
Market Momentum
7.08
Positive
52.60
Neutral
53.54
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE, the sentiment is Neutral. The current price of 509.59 is below the 20-day moving average (MA) of 514.98, above the 50-day MA of 484.90, and above the 200-day MA of 446.61, indicating a neutral trend. The MACD of 7.08 indicates Positive momentum. The RSI at 52.60 is Neutral, neither overbought nor oversold. The STOCH value of 53.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for DE.
Deere Risk Analysis
Deere disclosed 31 risk factors in its most recent earnings report. Deere reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Deere Peers Comparison
Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $167.93B | 17.40 | 55.67% | 1.58% | -5.58% | -7.37% | |
77 Outperform | $7.14B | 11.86 | 15.24% | 1.84% | 5.95% | -10.59% | |
75 Outperform | $48.23B | 13.94 | 19.90% | 1.44% | -8.64% | -31.57% | |
72 Outperform | $138.01B | 24.65 | 24.07% | 1.27% | -22.26% | -37.83% | |
66 Neutral | $15.71B | 15.13 | 13.26% | 1.99% | -21.99% | -52.11% | |
66 Neutral | $4.47B | 12.21 | 5.40% | 3.65% | 4.14% | -12.00% | |
55 Neutral | $7.50B | 46.40 | -13.60% | 1.15% | -23.02% | -152.78% |
* Industrials Sector Average
Performance Comparison
DE
Deere
509.59
135.92
36.37%
AGCO
Agco
100.59
-0.85
-0.84%
CAT
Caterpillar
357.05
39.80
12.55%
CNH
CNH Industrial
12.57
2.32
22.63%
OSK
Oshkosh
110.98
6.74
6.47%
PCAR
Paccar
91.88
-11.58
-11.19%
Deere Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Deere Appoints PACCAR CEO to Board of Directors
Positive
Nov 1, 2024
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.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.