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1. Company Snapshot

1.a. Company Description

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.


The Small Agriculture and Turf segment offers utility tractors, and related loaders and attachments; turf and utility equipment, including riding lawn equipment, commercial mowing equipment, golf course equipment, and utility vehicles, as well as implements for mowing, tilling, snow and debris handling, aerating, residential, commercial, golf, and sports turf care applications; other outdoor power products; and hay and forage equipment.This segment also resells products from other manufacturers.It serves dairy and livestock producers, crop producers, and turf and utility customers.


The Construction and Forestry segment provides a range of backhoe loaders, crawler dozers and loaders, four-wheel-drive loaders, excavators, motor graders, articulated dump trucks, landscape and skid-steer loaders, milling machines, pavers, compactors, rollers, crushers, screens, asphalt plants, log skidders, log feller bunchers, log loaders and forwarders, log harvesters, and attachments; and roadbuilding equipment.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.


Deere & Company was founded in 1837 and is headquartered in Moline, Illinois.

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1.b. Last Insights on DE

Deere & Company's recent performance faces challenges due to a cautious 2026 outlook, despite strong Q4 revenue of $12.39 billion, an 11% year-over-year increase. Rising production costs, tariffs, and weak agricultural markets are pressuring profitability. Management expects a 5% revenue decline and a 13% profit drop for 2026, with agricultural demand and crop receipts projected to fall. Several firms, including Advisors Asset Management Inc. and Bahl & Gaynor Inc., have reduced their stakes in the company. Jonathan Sakraida has a Sell rating and a $400 price target.

1.c. Company Highlights

2. Deere & Company's Fiscal 2025 Results: A Resilient Performance Amidst Challenges

Deere & Company's fiscal 2025 results reflect a resilient performance, with equipment operations delivering 9.2% margins in Q4 and 12.6% for the full year, resulting in over $5 billion in net income. Net sales and revenues for the full year were $45.7 billion, down 12%, while net sales for equipment operations were $38.9 billion, down 13%. The company's earnings per share (EPS) came in at $18.5, with actual EPS at $3.93 relative to estimates at $3.84. The equipment operations cash flow was $5.1 billion, enabling the return of over $2.8 billion to shareholders via dividends and share repurchases.

Publication Date: Nov -29

📋 Highlights
  • 2025 Net Income:: Over $5 billion, with full-year equipment operations margins at 12.6% despite 12% sales decline.
  • 2026 Guidance:: Net income forecasted at $4–4.75 billion, with cash flow from equipment operations projected at $4–5 billion despite $1.2 billion tariff impact.
  • Inventory Efficiency:: New field inventory for 220+hp tractors at 17-year low, with 8% inventory-to-sales ratio for combines and four-wheel drive tractors.
  • Segment Growth:: Small Ag & Turf and Construction & Forestry forecasted 10% sales growth in 2026, while Production & Precision Ag faces 5–10% decline.
  • Technology Impact:: John Deere Operations Center covers 500 million acres, and See and Spray achieves 50% herbicide savings, covering 5+ million acres.

Segment-wise Performance and Outlook

The company's segment-wise performance and outlook indicate a challenging year ahead, particularly in the Production and Precision Ag segment, where net sales are expected to be down 5-10% in 2026. However, the Small Ag and Turf segment is expected to see growth, with net sales up around 10%, driven by improving end-market demand and producing closer to retail demand. The Construction and Forestry segment is also expected to grow, with net sales up around 10%, driven by producing North American earthmoving equipment in line with retail demand.

Technological Advancements and Growth Drivers

Deere & Company has made significant advancements in technology, including the John Deere Operations Center, which has engaged over 3,200 customer organizations. The company's automation technologies, such as See and Spray, have seen impressive adoption, with over 5 million acres covered and an average herbicide savings of around 50%. The installed base is growing with new model year 2026 sprayers and additional retrofit kits, contributing to growth.

Valuation and Financial Metrics

Deere & Company's current valuation metrics, such as a P/E Ratio of 24.98, P/B Ratio of 4.84, and EV/EBITDA of 16.4, indicate a premium valuation. However, the company's ROE (%) of 20.54 and ROIC (%) of 7.89 suggest strong profitability. The Dividend Yield (%) of 1.4 and Free Cash Flow Yield (%) of 2.57 indicate a relatively attractive return for shareholders. Analysts estimate next year's revenue growth at 4.2%, which may impact the company's valuation multiples.

Guidance and Outlook

The company's guidance for 2026 assumes a challenging year due to tariffs, with a $1.2 billion pretax hit. However, Deere expects to see improvement in margins as the year progresses, with a more traditional seasonality pattern. The company remains focused on long-term customer value through technology, expecting future growth and greater value for shareholders and stakeholders.

3. NewsRoom

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Cargill Chair and CEO Brian Sikes joins Deere & Company's Board of Directors

Dec -04

Source: prnewswire.com

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Deere & Company Announces Quarterly Dividend

Dec -03

Source: prnewswire.com

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Cathie Wood Goes Shopping: 3 Stocks She Just Bought

Dec -02

Source: fool.com

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Analyst Favors Caterpillar Over Deere As Machinery Markets Near Trough Levels

Dec -01

Source: feeds.benzinga.com

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DEERE INVESTOR DAY TO BE BROADCAST ON WEBSITE

Dec -01

Source: prnewswire.com

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Burlington Stores, Oracle, Nutanix Are Among Top 10 Large Cap Losers Last Week (Nov. 24-Nov. 28): Are the Others in Your Portfolio?

Nov -30

Source: feeds.benzinga.com

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These Analysts Revise Their Forecasts On Deere After Q4 Results

Nov -28

Source: benzinga.com

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ETFs in Spotlight as Deere Slumps After Q4 Earnings Fall 14% Y/Y

Nov -28

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.21%)

6. Segments

Production & Precision AG

Expected Growth: 8.4%

Deere's Production & Precision AG segment benefits from increasing adoption of precision agriculture, driven by farm consolidation, government initiatives, and growing demand for sustainable farming practices.

Small AG & Turf

Expected Growth: 4.5%

Deere & Company's Small AG & Turf segment is driven by increasing demand for lawn and landscape services, growth in the global golf course industry, and rising adoption of precision agriculture and technology solutions.

Construction and Forestry

Expected Growth: 4.5%

Deere & Company's Construction and Forestry segment growth is driven by increasing infrastructure spending, urbanization, and the need for efficient equipment, which will continue to fuel demand for the company's machinery and technology solutions.

Financial Services

Expected Growth: 5.3%

Deere & Company's financial services segment will grow due to increasing global demand for agricultural equipment and infrastructure, driven by population growth and urbanization, alongside the company's expanding credit and financing services offerings.

Other Revenues

Expected Growth: 6.5%

Deere & Company’s other revenues include finance and insurance, driving growth through expansion in emerging markets, increasing adoption of precision agriculture, and rising demand for agricultural equipment financing.

7. Detailed Products

Agricultural Tractors

Deere & Company offers a wide range of agricultural tractors suitable for various farming applications, from small-scale to large-scale farming operations.

Combine Harvesters

Deere & Company's combine harvesters are designed for efficient and effective harvesting of crops such as wheat, corn, soybeans, and more.

Forage Harvesters

Deere & Company's forage harvesters are designed for harvesting and processing forage crops such as corn, alfalfa, and grass.

Hay and Forage Equipment

Deere & Company offers a range of hay and forage equipment, including balers, mowers, and tedders.

Lawn and Garden Tractors

Deere & Company's lawn and garden tractors are designed for residential and commercial lawn care applications.

Compact Utility Tractors

Deere & Company's compact utility tractors are designed for small-scale farming, landscaping, and construction applications.

Skid-Steer Loaders

Deere & Company's skid-steer loaders are designed for construction, landscaping, and agricultural applications.

Forestry Equipment

Deere & Company's forestry equipment includes feller bunchers, harvesters, and skidders for logging and forestry applications.

Golf and Turf Equipment

Deere & Company's golf and turf equipment includes mowers, aerators, and other equipment for golf courses, parks, and sports fields.

Construction and Forestry Technology

Deere & Company's construction and forestry technology includes precision agriculture and construction solutions.

8. Deere & Company's Porter Forces

Forces Ranking

Threat Of Substitutes

Deere & Company faces moderate threat from substitutes, as customers have limited alternatives for agricultural and construction equipment. However, the company's strong brand reputation and quality products help mitigate this threat.

Bargaining Power Of Customers

Deere & Company's customers have limited bargaining power due to the company's strong market position and diverse customer base. Additionally, the company's products are often customized to meet specific customer needs, reducing the bargaining power of customers.

Bargaining Power Of Suppliers

Deere & Company's suppliers have moderate bargaining power due to the company's dependence on a few key suppliers for critical components. However, the company's strong relationships with suppliers and its ability to negotiate prices help mitigate this threat.

Threat Of New Entrants

Deere & Company faces a low threat from new entrants due to the high barriers to entry in the agricultural and construction equipment industries. The company's strong brand reputation, extensive distribution network, and significant research and development investments create significant entry barriers for new competitors.

Intensity Of Rivalry

Deere & Company operates in a highly competitive industry, with several established players competing for market share. The company faces intense rivalry from competitors such as Caterpillar, Kubota, and AGCO, which can lead to pricing pressure and increased marketing expenses.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 74.43%
Debt Cost 4.96%
Equity Weight 25.57%
Equity Cost 9.20%
WACC 6.05%
Leverage 291.08%

11. Quality Control: Deere & Company passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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TransDigm Group

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Value: 3.0

Growth: 7.9

Quality: 6.7

Yield: 9.0

Momentum: 4.0

Volatility: 8.0

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PACCAR

A-Score: 6.0/10

Value: 3.7

Growth: 6.7

Quality: 6.1

Yield: 8.0

Momentum: 3.0

Volatility: 8.3

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Paychex

A-Score: 5.8/10

Value: 1.8

Growth: 5.8

Quality: 9.0

Yield: 6.0

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REV Group

A-Score: 5.8/10

Value: 4.1

Growth: 6.2

Quality: 6.3

Yield: 4.0

Momentum: 10.0

Volatility: 4.0

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A-Score: 5.6/10

Value: 2.0

Growth: 7.0

Quality: 7.0

Yield: 3.0

Momentum: 7.5

Volatility: 7.3

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Deere

A-Score: 5.3/10

Value: 2.8

Growth: 6.9

Quality: 4.8

Yield: 2.0

Momentum: 6.5

Volatility: 8.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

475.11$

Current Price

475.11$

Potential

-0.00%

Expected Cash-Flows