Deere (DE) AI Stock Analysis

• Market Cap: $130.73B
• Dividend Yield: 1.3%
• Average Volume (3M): 1.39M
• Price to Earnings (P/E): 21.3
• Beta (1Y): 0.93
• Revenue Growth: -20.93%
• EPS Growth: -34.33%
• Country: US
• Employees: 35,200
• Sector: Industrials
• Sector Strength: 77
• Industry: Agricultural - Machinery
• EPS (TTM): 3.19
• Shares Outstanding: 271,413,940
• 10 Day Avg. Volume: 1,023,939
• 30 Day Avg. Volume: 1,385,994
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.43
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 9.61
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $487.25
• Price Target Upside: 3.14% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14

Deere's overall stock score reflects a balanced view of its financial strength and operational efficiency against recent challenges in revenue and market demand. The robust financial performance, supported by strong margins and cash flow, is offset by technical indicators showing mixed signals and a cautious earnings outlook due to declining sales. Fair valuation and moderate dividend yield add stability to the investment case.

Positive Factors

Agricultural Market Support

A ~$30B+ aid package for US farmers driving ~30% increase in 2025 farm income YoY has driven strength in Ag OEM stocks.

Earnings Performance

Deere will deliver considerably higher margins and earnings than in prior cycles, adding fuel to the normal cyclical multiple expansion on trough fundamentals.

Market Performance

The stock has outperformed the broader market so far.

Negative Factors

Financial Performance

Net income decreased due to a higher provision for credit losses and less favorable financing spreads, primarily driven by the receivable portfolio mix.

Macroeconomic Risks

The proposal by the CBO to cut crop subsidy in the coming years is a macro risk factor.

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, commonly known as John Deere, is a leading American corporation that manufactures agricultural, construction, and forestry machinery, diesel engines, drivetrains used in heavy equipment, and lawn care equipment. Founded in 1837 and headquartered in Moline, Illinois, Deere operates through three primary segments: Agriculture and Turf, Construction and Forestry, and Financial Services. The company is renowned for its iconic green and yellow machinery, innovative technology solutions, and commitment to sustainability.

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

Deere Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 472.40
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• 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 472.4 is above the 20-day moving average (MA) of 462.05, above the 50-day MA of 466.18, and above the 200-day MA of 427.22, indicating a bullish trend. The MACD of 3.99 indicates Negative momentum. The RSI at 54.25 is Neutral, neither overbought nor oversold. The STOCH value of 60.40 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	$46.71B	13.57	19.90%	1.38%	-8.64%	-31.57%
OSK	76 Outperform	$5.68B	9.57	15.24%	2.14%	5.95%	-10.59%
CAT	72 Outperform	$150.92B	15.74	55.67%	1.76%	-5.58%	-7.37%
DE	70 Outperform	$130.73B	21.35	27.91%	1.30%	-20.93%	-34.33%
CNH	70 Outperform	$15.45B	14.95	13.26%	3.80%	-21.99%	-52.11%
Sector *	64 Neutral	$4.25B	11.69	5.23%	249.83%	4.04%	-9.46%
AGCO	55 Neutral	$7.04B	46.40	-13.60%	1.23%	-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.