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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 was driven by strong Q1 2026 earnings, with net sales and revenues up 13% to $9.611 billion and equipment operations net sales increasing 18% to $8.001 billion. The company's net income was $656 million or $2.42 per diluted share. Robust infrastructure demand and strong price realization in Construction & Forestry and Small Ag & Turf segments contributed to the growth. Additionally, several institutional investors, including Envestnet Asset Management Inc. and Smartleaf Asset Management LLC, increased their holdings in the company.

1.c. Company Highlights

2. Deere & Company Beats Expectations with Strong Q1 Earnings

Deere & Company reported a 5.9% operating margin for equipment operations in the first quarter, with net sales and revenues up 13% to $9.611 billion. Equipment operations net sales increased 18% to $8.001 billion, driven by a 24% growth in Small Ag & Turf and 34% in Construction & Forestry. Net income attributable to Deere & Company was $656 million or $2.42 per diluted share, beating analyst estimates of $2.02. The company's financial performance was robust, with revenue growth driven by strong demand in key segments.

Publication Date: Feb -20

📋 Highlights
  • Equipment Sales Growth: Equipment operations net sales surged 18% to $8.001 billion, driven by 24% growth in Small Ag & Turf and 34% in Construction & Forestry.
  • Net Income Expansion: Net income attributable to Deere rose to $656 million ($2.42 per share), reflecting strong operational performance and revenue growth.
  • 2026 Outlook Raised: Projects mid-single-digit equipment sales growth, with net income between $4.5–$5 billion and operating cash flow of $4.5–$5.5 billion.
  • Strategic Technology Investment: Acquired Tenna for $750 million to enhance contractor workflow solutions, aligning with digital innovation goals.
  • Market Position Strengthening: Tariff costs ($1.2 billion) offset by geographic mix improvements, with large ag margins expected to remain double-digit through 2024.

Segment Performance

The company's segment performance was a key highlight, with Small Ag & Turf and Construction & Forestry driving growth. The company saw positive developments in the ag industry, including supportive government policies and a stabilization of U.S. ag fundamentals. Used inventory levels are decreasing, and large tractor order velocity in North America has picked up, with visibility into the fourth quarter.

Outlook and Guidance

The company improved its outlook for 2026, projecting mid-single-digit net sales growth in equipment operations, driven by a 15% growth in Small Ag & Turf and 15% in Construction & Forestry. The company expects net income between $4.5 billion and $5 billion, with an effective tax rate between 25% and 27%, and operating cash flow from equipment operations between $4.5 billion and $5.5 billion. Industry outlooks were also updated, with the U.S. and Canada large ag equipment market expected to decline 15-20%, while small ag and turf in the U.S. and Canada is expected to be flat to up 5%.

Valuation and Metrics

Using the current valuation metrics, Deere & Company's P/E Ratio is 35.6, indicating a premium valuation. The company's ROE is 19.77%, and ROIC is 16.61%, indicating strong profitability. The EV/EBITDA ratio is 16.05, which is relatively reasonable. With analysts estimating next year's revenue growth at 9.3%, the company's valuation appears to be largely justified, but investors should be cautious about potential headwinds in the market.

Operational Highlights

The company is making investments to meet growing demand, including new excavator models and digital solutions. The acquisition of Tenna, a leading technology platform for contractor workflows, aligns with the company's strategy to offer customers a unique value proposition to optimize their fleets, operations, and job sites. The company is optimistic about its prospects, citing a diversified portfolio and improving market conditions.

Regional Dynamics and Market Trends

Regional dynamics show North America production will pick up in Q2, and order books for tractors are now into the fourth quarter. The company is cautious about the outlook, with some puts and takes in different regions, including South America, where high interest rates are pressuring customers. Despite this, domestic consumption of grains in North and South America is strong, with increased crush of soybeans in North America and higher exports of corn and ethanol.

3. NewsRoom

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Coastline Trust Co Grows Stock Holdings in Deere & Company $DE

09:00

Source: defenseworld.net

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AIA Group Ltd Has $15.94 Million Stock Holdings in Deere & Company $DE

Mar -19

Source: defenseworld.net

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Danske Bank A S Acquires Shares of 112,928 Deere & Company $DE

Mar -19

Source: defenseworld.net

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Deere vs. AGCO Corp: Which Farm Equipment Stock Is the Better Buy Now?

Mar -18

Source: zacks.com

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Deere Shares Rise Over 2% After Key Trading Signal

Mar -18

Source: benzinga.com

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Deere & Company $DE Holdings Boosted by Captrust Financial Advisors

Mar -18

Source: defenseworld.net

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Banco Bilbao Vizcaya Argentaria S.A. Has $10.17 Million Position in Deere & Company $DE

Mar -16

Source: defenseworld.net

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Alliancebernstein L.P. Buys 26,508 Shares of Deere & Company $DE

Mar -16

Source: defenseworld.net

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

A-Score: 7.0/10

Value: 3.0

Growth: 8.0

Quality: 6.7

Yield: 9.0

Momentum: 7.0

Volatility: 8.3

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REV Group

A-Score: 6.1/10

Value: 3.8

Growth: 8.2

Quality: 6.3

Yield: 4.0

Momentum: 9.5

Volatility: 4.7

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PACCAR

A-Score: 6.0/10

Value: 4.1

Growth: 6.7

Quality: 5.0

Yield: 8.0

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Volatility: 8.3

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Paychex

A-Score: 6.0/10

Value: 2.1

Growth: 5.8

Quality: 9.0

Yield: 7.0

Momentum: 2.5

Volatility: 9.3

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Caterpillar

A-Score: 5.7/10

Value: 2.0

Growth: 6.9

Quality: 6.2

Yield: 3.0

Momentum: 8.5

Volatility: 7.3

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Deere

A-Score: 5.4/10

Value: 2.9

Growth: 5.9

Quality: 4.9

Yield: 3.0

Momentum: 7.0

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

565.46$

Current Price

565.46$

Potential

-0.00%

Expected Cash-Flows