Assessing John Deere’s Value After Precision Agriculture Technology Push and 13% Stock Rally in 2025

• Wondering if Deere is a smart buy at today’s price? You’re not alone, and knowing what’s fair value here could make all the difference for your portfolio.
• The stock has climbed an impressive 13.2% year-to-date and is up 21.6% over the past year, despite dipping slightly this week.
• Market buzz lately has focused on Deere’s push into precision agriculture technology and strategic partnerships. These moves have caught both investors' and industry watchers' eyes. These developments are shaping new conversations about the company's future earnings potential and competitive edge.
• According to our valuation checks, Deere scores 3 out of 6 for being undervalued, so there’s already a case building here. We’ll dive into how analysts typically value the stock next, plus reveal an even sharper way to size up its real worth by the end of the article.

Deere delivered 21.6% returns over the last year. See how this stacks up to the rest of the Machinery industry.

Approach 1: Deere Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model is a method that estimates a company's fair value by projecting its future cash flows and then discounting those amounts back to reflect their worth today. This approach helps investors assess whether a stock is priced attractively relative to its true earning potential.

For Deere, the current Free Cash Flow is $4.83 billion. Looking ahead, analysts forecast that annual Free Cash Flow could rise to $12.04 billion by 2029. It's important to note that analysts provide direct estimates for the next five years, and any further projections are calculated using extrapolation methods.

By summing and discounting these expected future cash flows, the DCF analysis produces an intrinsic value estimate of $831.93 per share. At today's prices, this suggests Deere stock is trading at a 43.1% discount to its calculated fair value.

The takeaway, based on this widely used valuation method, is clear: Deere currently appears substantially undervalued.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Deere is undervalued by 43.1%. Track this in your watchlist or portfolio, or discover 870 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Deere.

Approach 2: Deere Price vs Earnings

For profitable companies like Deere, the Price-to-Earnings (PE) ratio is a tried-and-true valuation tool. It helps investors gauge how much the market is willing to pay today for a dollar of the company’s earnings. A higher PE is typically justified for firms with stronger growth prospects and lower risks, as investors expect bigger rewards ahead. In contrast, slower growth or higher risks generally warrant a lower PE ratio.

Deere’s current PE ratio stands at 24.6x. That is in line with its industry average of 24.1x and close to its peer group’s average of 23.1x. In other words, Deere is priced similarly to its direct competitors and the broader machinery sector on this metric.

However, benchmark averages only tell part of the story. Simply Wall St’s proprietary “Fair Ratio” digs deeper, estimating the most suitable PE for Deere given its unique blend of earnings growth, risk profile, profit margins, industry, and market cap. For Deere, the Fair Ratio calculates to 34.1x. Unlike simple industry comparisons, this approach provides a more tailored, forward-looking assessment of fair value.

Since Deere’s actual PE ratio is notably below its calculated Fair Ratio, the stock currently appears undervalued when assessed through this lens.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1398 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Deere Narrative

Earlier we mentioned that there's an even better way to understand valuation. Let's introduce you to Narratives, a more dynamic approach that goes beyond traditional metrics. A Narrative is simply your perspective or story about a company’s future, combining your assumptions about its prospects and risks with projected numbers like future revenue, earnings, and margins. By connecting the company’s story to a financial forecast and ultimately to a fair value estimate, Narratives bridge the gap between what you believe and what the numbers say.

This approach is both easy and accessible, available on Simply Wall St's platform within the Community page, where millions of investors compare their views. Narratives empower you to confidently decide when to buy or sell by viewing how your Fair Value differs from the current Price, and they update automatically as new news or earnings appear. This keeps your view relevant in real time.

For example, some investors might create a Narrative for Deere expecting strong technology adoption and margin growth, arriving at an optimistic fair value of $724.0. A more cautious view could set fair value as low as $460.0, demonstrating how Narratives help capture every unique perspective that shapes the market.

Do you think there's more to the story for Deere? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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