DE Stock Overview
Deere & Company manufactures and distributes various equipment worldwide.
Price History & Performance
|Historical stock prices|
|Current Share Price||US$334.22|
|52 Week High||US$446.76|
|52 Week Low||US$283.81|
|1 Month Change||-13.89%|
|3 Month Change||7.51%|
|1 Year Change||-4.30%|
|3 Year Change||101.02%|
|5 Year Change||166.12%|
|Change since IPO||3,095.73%|
Recent News & Updates
Deere & Company: Structural Tailwinds Could Push The Stock Higher
Summary Deere & Company is the world’s largest manufacturer and vendor of agricultural machinery. I am bullish on Deere, as I believe the company is poised to benefit from structural tailwinds, most notably price inflation, population growth and climate change. New product initiatives in sustainable and digital farming should likely support a multi-year growth story. Personally, I believe that Deere should be valued at about $437.65/share, which would imply more than 25% upside. Deere stock has outperformed the S&P 500 YTD by about 22 percentage points. Thesis Deere & Co (DE) benefitted from the agriculture boom in 2022, which was amongst others provoked by the war in Ukraine. But at a one-year forward P/E of about x14 and a P/B of about x2.5, DE stock is still trading relatively cheap. Investors should consider that the agriculture boom, contrary to the energy boom, is likely sustainable and should bolster Deere’s financials well into 2023 and 2024. Moreover, new product initiatives in sustainable and digital farming should likely support a multi-year growth story (remember that Cathy Wood’s ARKX fund has invested). Personally, I value Deere & Co at $437.65/share. My calculation is supported by a residual earnings model anchored on analyst consensus EPS. For reference, Deere stock has lost less than 1% YTD, versus a loss of about 22% for the S&P 500 (SPX). Seeking Alpha About Deere & Co. Deere & Co is the world’s largest manufacturer and vendor of agricultural machinery. The company designs, develops, manufactures and markets leading producers of equipment for agriculture, construction and forestry industry, and recently has also ventured in road-building equipment through the acquisition of the German brand Wirtgen. That said, Deere owns more than 5 brands, including notable names such as Hagie, Mazzotti, Blue River technology and Harvest Profit. Deere operates four key segments: 1) production and precision agriculture, which accounts for more than 35% of total sales; 2) the small agriculture and turf segment, which is responsible for about 25% of total sales; 3) the construction and forestry segment with another 25% of sales; and 4) the financial services segment with less than 10% of revenues. Geographically, Deere sells worldwide, but generates more than 60% of revenues in the U.S. Europe accounts for 20% and ROW for the remainder. Structural Tailwinds In my opinion, there are two major structural tailwinds for Deere’s business growth: food price inflation and climate change. After almost half a decade of falling agricultural market prices (from 2016 to 2020), food price inflation is back. And while restrictive monetary policy can dampen demand for many consumer goods, the need for basic food remains independent from interest rate levels. Food inflation is not merely a function of the Russia-Ukraine war, but also a function of a structural supply shortage. Notably, in 2022, more than 800 million people do not have enough to eat. And with another two billion people expected to be born by 2050, the World Resources Institute estimates a 56% food gap between the crop calories produced in 2010 and the crop calories needed in 2050. The resulting potential tailwind for Deere is obvious. Moreover, I argue that climate change is another structural tailwind for the agriculture industry. The global food system is responsible for a third of man-made greenhouse gas emissions. And the hidden costs associated with the food industry are estimated at US$4.8 trillion. According, as ESG trends are accelerating, Deere’s equipment and other technology solutions will play a key role to transition towards more sustainable food ecosystem. Strong Fundamentals Given elevated crop prices, which were amongst others caused by the Ukraine-war induced "food shortage," Deere has seen an enormous tailwind. On August 19, Deere reported earnings for the June quarter and announced, in my opinion, strong results. Net income for the period between April to end of June increased by 22% year-over-year to $14.1 billion. Net income increase by 13% year-over-year to $1.88 billion. Operating costs were much higher than what I personally would have anticipated. In that context, the company argued as follows: our results reflected higher costs and production inefficiencies driven by the difficult supply-chain situation. CEO John C May commented: Looking ahead, we believe favorable conditions will continue into 2023 based on the strong response we have experienced to early-order programs… … We are working closely with our factories and suppliers to meet higher levels of customer demand next year. Additionally, we are confident the company’s smart industrial strategy and leap ambitions will continue unlocking new value for customers through Deere’s advanced technologies and solutions
These 4 Measures Indicate That Deere (NYSE:DE) Is Using Debt Reasonably Well
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|DE||US Machinery||US Market|
Return vs Industry: DE exceeded the US Machinery industry which returned -19.5% over the past year.
Return vs Market: DE exceeded the US Market which returned -23.1% over the past year.
|DE Average Weekly Movement||4.1%|
|Machinery Industry Average Movement||5.3%|
|Market Average Movement||6.9%|
|10% most volatile stocks in US Market||15.8%|
|10% least volatile stocks in US Market||2.8%|
Stable Share Price: DE is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.
Volatility Over Time: DE's weekly volatility (4%) has been stable over the past year.
About the Company
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.
Deere Fundamentals Summary
|DE fundamental statistics|
Is DE overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|DE income statement (TTM)|
|Cost of Revenue||US$32.76b|
Last Reported Earnings
Jul 31, 2022
Next Earnings Date
Nov 23, 2022
|Earnings per share (EPS)||20.44|
|Net Profit Margin||12.76%|
How did DE perform over the long term?See historical performance and comparison
1.4%Current Dividend Yield
Does DE pay a reliable dividends?See DE dividend history and benchmarks
|Deere dividend dates|
|Ex Dividend Date||Sep 29 2022|
|Dividend Pay Date||Nov 08 2022|
|Days until Ex dividend||3 days|
|Days until Dividend pay date||43 days|
Does DE pay a reliable dividends?See DE dividend history and benchmarks
Is DE undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score 4/6
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Key Valuation Metric
Which metric is best to use when looking at relative valuation for DE?
Other financial metrics that can be useful for relative valuation.
|What is DE's n/a Ratio?|
Price to Earnings Ratio vs Peers
How does DE's PE Ratio compare to its peers?
|DE PE Ratio vs Peers|
|Company||PE||Estimated Growth||Market Cap|
CNHI CNH Industrial
Price-To-Earnings vs Peers: DE is expensive based on its Price-To-Earnings Ratio (16.4x) compared to the peer average (13.4x).
Price to Earnings Ratio vs Industry
How does DE's PE Ratio compare vs other companies in the US Machinery Industry?
Price-To-Earnings vs Industry: DE is good value based on its Price-To-Earnings Ratio (16.4x) compared to the US Machinery industry average (18.4x)
Price to Earnings Ratio vs Fair Ratio
What is DE's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
|Current PE Ratio||16.4x|
|Fair PE Ratio||26.1x|
Price-To-Earnings vs Fair Ratio: DE is good value based on its Price-To-Earnings Ratio (16.4x) compared to the estimated Fair Price-To-Earnings Ratio (26.1x).
Share Price vs Fair Value
What is the Fair Price of DE when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: DE ($334.22) is trading below our estimate of fair value ($372.34)
Significantly Below Fair Value: DE is trading below fair value, but not by a significant amount.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.
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How is Deere forecast to perform in the next 1 to 3 years based on estimates from 19 analysts?
Future Growth Score2/6
Future Growth Score 2/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: DE's forecast earnings growth (4.9% per year) is above the savings rate (1.9%).
Earnings vs Market: DE's earnings (4.9% per year) are forecast to grow slower than the US market (14.7% per year).
High Growth Earnings: DE's earnings are forecast to grow, but not significantly.
Revenue vs Market: DE's revenue (6.5% per year) is forecast to grow slower than the US market (7.6% per year).
High Growth Revenue: DE's revenue (6.5% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: DE's Return on Equity is forecast to be high in 3 years time (27.5%)
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How has Deere performed over the past 5 years?
Past Performance Score3/6
Past Performance Score 3/6
Growing Profit Margin
Earnings vs Industry
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: DE has high quality earnings.
Growing Profit Margin: DE's current net profit margins (12.8%) are lower than last year (12.8%).
Past Earnings Growth Analysis
Earnings Trend: DE's earnings have grown significantly by 24.6% per year over the past 5 years.
Accelerating Growth: DE's earnings growth over the past year (13.6%) is below its 5-year average (24.6% per year).
Earnings vs Industry: DE earnings growth over the past year (13.6%) exceeded the Machinery industry 9.4%.
Return on Equity
High ROE: Whilst DE's Return on Equity (32.25%) is high, this metric is skewed due to their high level of debt.
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How is Deere's financial position?
Financial Health Score4/6
Financial Health Score 4/6
Short Term Liabilities
Long Term Liabilities
Financial Position Analysis
Short Term Liabilities: DE's short term assets ($63.5B) exceed its short term liabilities ($32.1B).
Long Term Liabilities: DE's short term assets ($63.5B) exceed its long term liabilities ($35.6B).
Debt to Equity History and Analysis
Debt Level: DE's net debt to equity ratio (250.6%) is considered high.
Reducing Debt: DE's debt to equity ratio has reduced from 436.9% to 270.4% over the past 5 years.
Debt Coverage: DE's debt is not well covered by operating cash flow (7.4%).
Interest Coverage: DE's interest payments on its debt are well covered by EBIT (34.1x coverage).
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What is Deere current dividend yield, its reliability and sustainability?
Dividend Score 3/6
Cash Flow Coverage
Current Dividend Yield
Upcoming Dividend Payment
Dividend Yield vs Market
Notable Dividend: DE's dividend (1.35%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.65%).
High Dividend: DE's dividend (1.35%) is low compared to the top 25% of dividend payers in the US market (4.57%).
Stability and Growth of Payments
Stable Dividend: DE's dividends per share have been stable in the past 10 years.
Growing Dividend: DE's dividend payments have increased over the past 10 years.
Earnings Payout to Shareholders
Earnings Coverage: With its low payout ratio (21.3%), DE's dividend payments are well covered by earnings.
Cash Payout to Shareholders
Cash Flow Coverage: With its high cash payout ratio (213.5%), DE's dividend payments are not well covered by cash flows.
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How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
John May (53 yo)
Mr. John C. May II is Chairman of the Board of Directors and Chief Executive Officer of Deere & Company. He is responsible for leading a team of more than 75,000 employees in 30+ countries across the globe...
CEO Compensation Analysis
Compensation vs Market: John's total compensation ($USD19.91M) is above average for companies of similar size in the US market ($USD13.05M).
Compensation vs Earnings: John's compensation has increased by more than 20% in the past year.
Experienced Management: DE's management team is considered experienced (2.8 years average tenure).
Experienced Board: DE's board of directors are considered experienced (6.8 years average tenure).
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.
Recent Insider Transactions
|14 Mar 22||SellUS$3,939,039||Markwart von Pentz||Individual||10,023||US$393.00|
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
|Ownership||Name||Shares||Current Value||Change %||Portfolio %|
Deere & Company's employee growth, exchange listings and data sources
- Name: Deere & Company
- Ticker: DE
- Exchange: NYSE
- Founded: 1837
- Industry: Agricultural and Farm Machinery
- Sector: Capital Goods
- Implied Market Cap: US$100.874b
- Shares outstanding: 301.82m
- Website: https://www.deere.com
Number of Employees
- Deere & Company
- One John Deere Place
- United States
|Ticker||Exchange||Primary Security||Security Type||Country||Currency||Listed on|
|DE||NYSE (New York Stock Exchange)||Yes||Common Shares||US||USD||Jan 1968|
|DCO||DB (Deutsche Boerse AG)||Yes||Common Shares||DE||EUR||Jan 1968|
|DCO||XTRA (XETRA Trading Platform)||Yes||Common Shares||DE||EUR||Jan 1968|
|DE||SWX (SIX Swiss Exchange)||Yes||Common Shares||CH||CHF||Jan 1968|
|0R2P||LSE (London Stock Exchange)||Yes||Common Shares||GB||USD||Jan 1968|
|DEER||WBAG (Wiener Boerse AG)||Yes||Common Shares||AT||EUR||Jan 1968|
|DCO||ETLX (Eurotlx)||Yes||Common Shares||IT||EUR||Jan 1968|
|DE *||BMV (Bolsa Mexicana de Valores)||Yes||Common Shares||MX||MXN||Jan 1968|
|DE||BASE (Buenos Aires Stock Exchange)||CEDEAR EACH 10 REP 1||AR||ARS||Nov 2002|
|DED||BASE (Buenos Aires Stock Exchange)||CEDEAR EACH 10 REP 1||AR||USD||Nov 2002|
|DEEC34||BOVESPA (Bolsa de Valores de Sao Paulo)||BDR EACH 2 REP 1 COM||BR||BRL||May 2019|
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2022/09/24 00:00|
|End of Day Share Price||2022/09/23 00:00|
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.