Deere & Company
DE
$0.00
+0.88%
Deere & Company is the world's leading manufacturer of agricultural equipment and a major producer of construction machinery. It is defined by its dominant market position and extensive global dealer network, which are core advantages supporting its integrated equipment and financial services business.…
DE
Deere & Company
$0.00
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Investment Opinion: Should I buy DE Today?
Based on a synthesis of the available data, the objective assessment for Deere & Company is a Hold. The company's strong market position, revenue growth, and cash flow generation are positive, but these are counterbalanced by declining profitability metrics, high leverage, and a full valuation. The stock has already delivered significant outperformance over the past year, and the current price level, coupled with near-term cyclical uncertainties, suggests limited immediate upside potential. Investors may find better entry points during market pullbacks.
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DE 12-Month Price Forecast
The analysis indicates a balanced risk/reward profile. The strong business fundamentals and recent momentum are offset by cyclical risks and full valuation, warranting a neutral stance with medium confidence.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Deere & Company's 12-month outlook, with a consensus price target around $0.00 and implied upside of — versus the current price.
Average Target
$0.00
7 analysts
Implied Upside
—
vs. current price
Analyst Count
7
covering this stock
Price Range
$0 - $0
Analyst target range
No sufficient analyst coverage available. The provided data includes recent rating actions from various firms (e.g., Morgan Stanley: Overweight, Citigroup: Neutral, Jefferies: Underperform) but does not contain a consensus target price or a detailed ratings distribution summary. Therefore, a comprehensive summary of Wall Street analyst consensus cannot be provided based on the available inputs.
Bulls vs Bears: DE Investment Factors
Deere exhibits a strong fundamental business with market leadership and solid revenue growth, but faces headwinds from margin compression and cyclical pressures. The stock's recent strong performance and premium valuation are balanced against its financial leverage and exposure to economic cycles.
Bullish
- Strong Market Leadership: Dominant global position in agricultural equipment with extensive dealer network.
- Robust Revenue Growth: Q1 2026 revenue grew 16.3% year-over-year to $9.61 billion.
- Healthy Financial Position: Strong current ratio of 2.31 and robust TTM free cash flow of $3.58B.
- Positive Long-Term Momentum: Stock up 20.99% over 3 months, significantly outperforming the SPY.
Bearish
- Profitability Compression: Q1 net margin fell to 6.83% from 10.52% YoY; gross margin declined.
- High Financial Leverage: Elevated debt-to-equity ratio of 2.46 increases interest rate risk.
- Cyclical Industry Exposure: Earnings are sensitive to agricultural and construction economic cycles.
- Premium Valuation: Forward P/E of 24.27 and P/S of 2.80 suggest limited near-term upside.
DE Technical Analysis
Overall Assessment: The stock has demonstrated strong long-term performance, with a 6-month gain of 21.97% and a 1-year gain of 20.02%, significantly outperforming the broader market (SPY) over these periods. The price has recovered from a low near $440 in October 2025 to a recent high above $660 in February 2026. Short-term Performance: Over the past month, the stock has declined by 10.55%, underperforming the SPY's -5.25% return. However, it has posted a substantial 20.99% gain over the past three months, far exceeding the SPY's -4.63% return, indicating recent volatility but strong intermediate-term momentum. Current Position: The current price of $563.30 sits approximately 16.4% below its 52-week high of $674.19 and 39.3% above its 52-week low of $404.42, placing it in the upper-mid range of its yearly trading band. The recent pullback from the February peak suggests a period of consolidation.
Beta
0.99
0.99x market volatility
Max Drawdown
-17.4%
Largest decline past year
52-Week Range
$404-$674
Price range past year
Annual Return
+22.3%
Cumulative gain past year
| Period | DE Return | S&P 500 |
|---|---|---|
| 1m | -7.0% | -4.3% |
| 3m | +23.3% | -4.0% |
| 6m | +24.4% | -2.0% |
| 1y | +22.3% | +22.2% |
| ytd | +23.3% | -3.8% |
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DE Fundamental Analysis
Revenue & Profitability: The most recent Q1 2026 revenue of $9.61 billion grew 16.3% year-over-year from the Q1 2025 revenue of $8.26 billion. However, profitability metrics have compressed; the Q1 2026 net margin was 6.83%, down from 10.52% in Q1 2025, and the gross margin declined to 34.66% from 39.03% in the prior-year quarter. Financial Health: The company maintains a strong current ratio of 2.31, indicating good short-term liquidity. Its debt-to-equity ratio is elevated at 2.46, reflecting significant leverage, which is common for capital-intensive industrial firms with a captive finance arm. The trailing twelve-month free cash flow is a robust $3.58 billion. Operational Efficiency: Return on Equity (ROE) stands at a healthy 19.37%, demonstrating effective use of shareholder capital. Return on Assets (ROA) is lower at 3.96%, which is typical for an asset-heavy business model. The company's operational efficiency is supported by its scale and market leadership.
Quarterly Revenue
$9.6B
2026-02
Revenue YoY Growth
+0.16%
YoY Comparison
Gross Margin
+0.34%
Latest Quarter
Free Cash Flow
$3.6B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is DE Overvalued?
Valuation Level: With positive net income, the primary valuation metric is the Price-to-Earnings (P/E) ratio. The trailing P/E is 24.89, and the forward P/E is 24.27, suggesting the market is pricing in stable future earnings. The Price-to-Sales (P/S) ratio is 2.80, and the Enterprise Value-to-Sales (EV/Sales) is 4.50. Peer Comparison: Data not available. Without provided industry average valuation multiples, a direct peer comparison cannot be made. The P/E ratios in the mid-20s indicate a premium valuation that likely reflects the company's market leadership and technology integration.
PE
24.9x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 10x~55x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
15.5x
Enterprise Value Multiple
Investment Risk Disclosure
Deere's primary risks stem from its cyclical business model and financial structure. The company operates in the capital-intensive agricultural and construction machinery sectors, making its earnings highly sensitive to commodity prices, farm income, and global economic conditions, as evidenced by the recent margin compression in Q1 2026. Financial risk is elevated due to significant leverage, with a debt-to-equity ratio of 2.46, which could pressure earnings if interest rates remain high or rise further. Operational risks include execution on its technology investments and potential supply chain disruptions. Furthermore, the stock's valuation (P/E ~24x) leaves little room for error, and a failure to meet growth expectations could lead to multiple contractions. Geopolitical tensions, as noted in recent news, also create a volatile macro environment that can impact capital spending and investor sentiment.
FAQ
The key risks include cyclical exposure to agricultural and construction markets, which can cause earnings volatility. Financial leverage is high, with a debt-to-equity ratio of 2.46, increasing sensitivity to interest rates. Recent margin compression (gross margin fell from 39.03% to 34.66% YoY) is a significant operational risk. Geopolitical tensions also pose a threat to global capital spending.
The 12-month outlook presents a base case target range of $540 to $620, implying modest upside from the current ~$563 price, with a 60% probability. The bull case (25% probability) targets a re-test of the 52-week high near $674, while the bear case (15% probability) could see a pullback toward the $440-$500 range if cyclical pressures intensify.
DE appears fairly valued to slightly overvalued based on current fundamentals. Its forward P/E of 24.27 and P/S ratio of 2.80 command a premium, which is justified by its market leadership but is difficult to sustain if profitability (net margin of 6.83%) does not recover. The valuation leaves little room for disappointment, aligning it closely with its intrinsic value under current conditions.
Based on current data, DE is rated a Hold. Its strong market position and 16.3% YoY revenue growth are positive, but these are balanced by a declining net margin (6.83% in Q1 2026) and a full valuation with a forward P/E of 24.27. The stock has already had a strong run, gaining over 20% in the past year, suggesting most near-term optimism may be priced in.
DE is more suitable for long-term investors who can weather the inherent cyclicality of its business. Its technology investments in precision agriculture are a long-term growth driver. Short-term trading is challenged by the stock's volatility, recent 10.55% one-month decline, and the current lack of a clear near-term catalyst for significant multiple expansion.