NYSE:DE

Stock Analysis Report

NOT FOR DISTRIBUTION
Header cover image

Executive Summary

Deere & Company, together with its subsidiaries, manufactures and distributes various equipment worldwide.


Snowflake Analysis

Established dividend payer with reasonable growth potential.


Similar Companies

Share Price & News

How has Deere's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: DE has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0.8%

DE

-0.8%

US Machinery

2.3%

US Market


1 Year Return

-3.8%

DE

-8.3%

US Machinery

6.7%

US Market

Return vs Industry: DE exceeded the US Machinery industry which returned -8.3% over the past year.

Return vs Market: DE underperformed the US Market which returned 6.7% over the past year.


Shareholder returns

DEIndustryMarket
7 Day0.8%-0.8%2.3%
30 Day5.3%2.5%7.4%
90 Day9.2%9.4%17.9%
1 Year-1.9%-3.8%-6.5%-8.3%9.0%6.7%
3 Year34.1%26.8%8.8%1.7%36.6%27.7%
5 Year83.2%64.1%47.5%29.8%64.2%46.1%

Price Volatility Vs. Market

How volatile is Deere's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Deere undervalued compared to its fair value and its price relative to the market?

17.83x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: DE ($159.09) is trading above our estimate of fair value ($129.12)

Significantly Below Fair Value: DE is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: DE is good value based on its PE Ratio (17.8x) compared to the US Machinery industry average (18.8x).

PE vs Market: DE is poor value based on its PE Ratio (17.8x) compared to the US market (16.2x).


Price to Earnings Growth Ratio

PEG Ratio: DE is good value based on its PEG Ratio (0.8x)


Price to Book Ratio

PB vs Industry: DE is overvalued based on its PB Ratio (4.2x) compared to the US Machinery industry average (1.9x).


Next Steps

Future Growth

How is Deere forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

23.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: DE's forecast earnings growth (23.7% per year) is above the savings rate (2.2%).

Earnings vs Market: DE's earnings (23.7% per year) are forecast to grow faster than the US market (22.9% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: DE's revenue (7.1% per year) is forecast to grow slower than the US market (9.4% per year).

High Growth Revenue: DE's revenue (7.1% 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 (27.1%)


Next Steps

Past Performance

How has Deere performed over the past 5 years?

13.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: DE has high quality earnings.

Growing Profit Margin: DE's current net profit margins (7.6%) are lower than last year (8.5%).


Past Earnings Growth Analysis

Earnings Trend: DE's earnings have grown by 13% per year over the past 5 years.

Accelerating Growth: DE's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: DE had negative earnings growth (-15.8%) over the past year, making it difficult to compare to the Machinery industry average (-5.4%).


Return on Equity

High ROE: Whilst DE's Return on Equity (23.64%) is high, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is Deere's financial position?


Financial Position Analysis

Short Term Liabilities: DE's short term assets ($55.9B) exceed its short term liabilities ($24.6B).

Long Term Liabilities: DE's short term assets ($55.9B) exceed its long term liabilities ($40.8B).


Debt to Equity History and Analysis

Debt Level: DE's debt to equity ratio (423.4%) is considered high.

Reducing Debt: DE's debt to equity ratio has reduced from 458.5% to 423.4% over the past 5 years.

Debt Coverage: DE's debt is not well covered by operating cash flow (11.3%).

Interest Coverage: DE's interest payments on its debt are well covered by EBIT (15.6x coverage).


Balance Sheet


Next Steps

Dividend

What is Deere current dividend yield, its reliability and sustainability?

1.91%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: DE's dividend (1.91%) is higher than the bottom 25% of dividend payers in the US market (1.68%).

High Dividend: DE's dividend (1.91%) is low compared to the top 25% of dividend payers in the US market (4.6%).


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.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (34.1%), DE's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: DE's dividends in 3 years are forecast to be well covered by earnings (23.1% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.7yrs

Average management tenure


CEO

John May (51yo)

0.67

Tenure

US$6,005,692

Compensation

Mr. John C. May II is Chairman of the Board of Directors and Chief Executive Officer of Deere & Company. He is responsible for leading efforts to maximize financial and operational performance and ensure t ...


CEO Compensation Analysis

Compensation vs Market: John's total compensation ($USD6.01M) is below average for companies of similar size in the US market ($USD11.50M).

Compensation vs Earnings: John's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
John May
Chairman0.67yrUS$6.01m0.014% $7.0m
Ryan Campbell
Senior VP & CFO1.25yrsUS$2.27m0.00085% $423.1k
Rajesh Kalathur
Chief Information Officer1.67yrsUS$5.44m0.014% $7.2m
Cory Reed
President of Ag & Turf Division1.25yrsUS$5.57m0.0036% $1.8m
James Field
Senior Adviserno dataUS$10.09m0.019% $9.4m
Jeffrey Trahan
Vice President of Pension Fund & Investments5.42yrsno datano data
Jahmy Hindman
Chief Technology Officerno datano datano data
Marc Howze
Group President of Lifecycle Solutions & Chief Administrative Officer3.67yrsno data0.0019% $920.8k
Josh Jepsen
Director of Investor Relationsno datano datano data
Mary K. Jones
Chief Legal Officer7.5yrsno data0.012% $5.8m

1.7yrs

Average Tenure

52yo

Average Age

Experienced Management: DE's management team is not considered experienced ( 1.7 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
John May
Chairman0.67yrUS$6.01m0.014% $7.0m
Charles Holliday
Independent Director2.5yrsUS$293.20k0.0038% $1.9m
Sherry Smith
Independent Director8.58yrsUS$319.64kno data
Clayton Jones
Independent Director12.92yrsUS$308.20k0.00026% $129.4k
Gregory Page
Independent Director7.5yrsUS$308.72k0.00035% $174.2k
Dipak Jain
Independent Director18.5yrsUS$340.15k0.0042% $2.1m
Sheila Talton
Independent Director4.58yrsUS$293.20kno data
Alan Heuberger
Independent Director3.58yrsUS$293.20k0.000030% $14.9k
Dmitri Stockton
Independent Director5.5yrsUS$293.20kno data
Michael Johanns
Independent Director5.5yrsUS$293.20kno data

5.5yrs

Average Tenure

65yo

Average Age

Experienced Board: DE's board of directors are considered experienced (5.5 years average tenure).


Ownership

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.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Deere & Company's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Deere & Company
  • Ticker: DE
  • Exchange: NYSE
  • Founded: 1837
  • Industry: Agricultural and Farm Machinery
  • Sector: Capital Goods
  • Market Cap: US$49.773b
  • Shares outstanding: 312.86m
  • Website: https://www.deere.com

Number of Employees


Location

  • Deere & Company
  • One John Deere Place
  • Moline
  • Illinois
  • 61265
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
DENYSE (New York Stock Exchange)YesCommon SharesUSUSDJan 1968
DCODB (Deutsche Boerse AG)YesCommon SharesDEEURJan 1968
DCOXTRA (XETRA Trading Platform)YesCommon SharesDEEURJan 1968
DESWX (SIX Swiss Exchange)YesCommon SharesCHCHFJan 1968
0R2PLSE (London Stock Exchange)YesCommon SharesGBUSDJan 1968
DEERWBAG (Wiener Boerse AG)YesCommon SharesATEURJan 1968
DCOETLX (Eurotlx)YesCommon SharesITEURJan 1968
DE *BMV (Bolsa Mexicana de Valores)YesCommon SharesMXMXNJan 1968
DEBASE (Buenos Aires Stock Exchange)CEDEAR EACH 2 REPR 1 ORD (USD)ARARSNov 2002
DEEC34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REP 0.5 COM USD1BRBRLMay 2019

Biography

Deere & Company, together with its subsidiaries, manufactures and distributes various equipment worldwide. The company operates through three segments: Agriculture and Turf, Construction and Forestry, and Financial Services. The Agriculture and Turf segment provides various agriculture and turf equipment, and related service parts, including large, medium, and utility tractors; tractor loaders; combines, cotton pickers, cotton strippers, and sugarcane harvesters; harvesting front-end equipment; sugarcane loaders and pull-behind scrapers; tillage, seeding, and application equipment comprising sprayers, nutrient management, and soil preparation machinery; self-propelled forage harvesters and attachments, balers, and mowers; riding lawn equipment and walk-behind mowers, golf course equipment, utility vehicles, and commercial mowing equipment along with associated implements; integrated agricultural management systems technology and solutions; and other outdoor power products. The Construction and Forestry segment offers a range of machines and service parts used in construction, earthmoving, road building, material handling, and timber harvesting, including backhoe loaders; crawler dozers and loaders; four-wheel-drive loaders; excavators; motor graders; articulated dump trucks; landscape loaders; skid-steer loaders; milling machines; recyclers; slipform pavers; surface miners; asphalt pavers; compactors; tandem and static rollers; mobile crushers and screens; mobile and stationary asphalt plants; log skidders; feller bunchers; log loaders; log forwarders; and log harvesters and related logging attachments. 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. The company was founded in 1837 and is headquartered in Moline, Illinois. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/07/11 23:54
End of Day Share Price2020/07/10 00:00
Earnings2020/05/03
Annual Earnings2019/11/03


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.