Deere & Company
DE
$647.47
+4.27%
Deere & Company is the world's leading manufacturer of agricultural equipment and a major producer of construction machinery, operating through segments including Production & Precision Agriculture (PPA), Small Agriculture & Turf (SAT), Construction & Forestry (CF), and Financial Services. As a market leader with a robust dealer network spanning over 100 countries, Deere differentiates itself through advanced precision agriculture technologies and a strong brand. The current investor narrative centers on the potential bottoming of the agricultural equipment cycle, with recent earnings beats and raised guidance fueling optimism, while concerns persist over rising input costs, geopolitical tensions affecting fertilizer prices, and the pace of adoption for its AI-driven autonomous machinery.…
DE
Deere & Company
$647.47
Related headlines
Investment Opinion: Should I buy DE Today?
Based on the analysis, DE is rated a Buy. The thesis is that Deere's market leadership, improving cyclical conditions, and AI-driven growth initiatives will drive earnings recovery, justifying the premium valuation. The consensus rating is Buy with an average target of $647.62, implying +6.4% upside. Key supporting data include revenue growth of 6.74% YoY, operating margin of 22.48%, ROE of 19.37%, and a forward PE of 27.03x, which is above the industry average but supported by superior profitability. The stock is trading at a 13% premium to peers, which is acceptable given its competitive advantages. However, this Buy rating is contingent on the agricultural cycle continuing to improve; if revenue growth decelerates below 5% or margins compress, the rating would be downgraded to Hold. Overall, DE is fairly valued relative to its growth prospects, but not a bargain.
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DE 12-Month Price Forecast
The AI model assesses DE as bullish with medium confidence. The combination of improving revenue growth, strong margins, and positive analyst sentiment supports a favorable outlook. However, the elevated valuation and cyclical risks temper confidence. The model would upgrade to high confidence if revenue growth accelerates above 10% and forward PE compresses below 25x. Conversely, a downgrade to neutral would occur if revenue growth falls below 3% or operating margin drops below 18%.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Deere & Company's 12-month outlook, with a consensus price target around $645.22 and implied upside of -0.3% versus the current price.
Average Target
$645.22
0 analysts
Implied Upside
-0.3%
vs. current price
Analyst Count
—
covering this stock
Price Range
$500 - $812
Analyst target range
Deere has coverage from 23 analysts, with a consensus recommendation of 'Buy' (mean rating 2.125). The average target price is $647.62, implying an upside of +6.4% from the current price of $608.85. The distribution includes 12 Buy, 8 Hold, and 3 Sell ratings, indicating a moderately bullish sentiment. The target range spans from $500 (low) to $812 (high), with the high target assuming strong cyclical recovery and successful AI adoption, while the low target reflects risks of margin compression and prolonged downturn. Recent ratings from firms like Citigroup (Neutral) and Jefferies (Hold) suggest a cautious stance, but the overall consensus remains positive.
Bulls vs Bears: DE Investment Factors
Deere presents a balanced risk-reward profile. Bullish factors include accelerating revenue growth, strong margins, and a favorable analyst consensus, while bearish concerns center on valuation premium, high debt, and cyclicality. Currently, the bull case has slightly stronger evidence given the recent earnings beat and raised guidance, but the elevated valuation and forward PE inversion create a key tension. The most critical factor is whether the agricultural cycle continues to recover; if it does, DE could re-rate higher, but any setback could trigger multiple compression.
Bullish
- Revenue Growth Reaccelerating: Q2 2026 revenue of $13.369B grew 6.74% YoY, marking a rebound from the cyclical trough. Sequential growth from Q1's $9.611B indicates strengthening demand across core segments.
- Strong Profitability and Margins: Operating margin of 22.48% in Q2 2026 and net margin of 13.26% demonstrate pricing power and operational efficiency. ROE stands at 19.37%, well above the industry average.
- Analyst Consensus Buy with Upside: 23 analysts rate DE a Buy (mean 2.125) with an average target of $647.62, implying +6.4% upside. The high target of $812 suggests potential for significant gains if the cycle fully recovers.
- Market Leadership and AI Edge: Deere is the world's leading ag equipment maker with a robust dealer network. Its precision agriculture and autonomous technology investments position it as an industry innovator, supporting long-term growth.
Bearish
- Elevated Valuation vs. Peers: Trailing PE of 24.89x and forward PE of 27.03x are above the industry average of 22x, representing a 13% premium. This leaves little room for error if earnings disappoint.
- Forward PE Higher Than Trailing: The forward PE (27.03x) exceeding the trailing PE (24.89x) implies expected earnings decline, which is unusual for a growth stock and signals cautious market sentiment.
- High Debt Levels: Debt-to-equity ratio of 2.46x is elevated, increasing financial risk. Interest expenses of $712M in Q2 2026 weigh on net income, and rising rates could further pressure earnings.
- Cyclical Downturn Risks: The agricultural equipment market is cyclical, and despite recent recovery, a prolonged downturn could hurt demand. The 52-week low of $433.00 is 29% below the current price, highlighting downside potential.
DE Technical Analysis
Deere's stock is in a clear uptrend over the past year, with a 1-year price change of +27.15% and a YTD gain of +30.43%. The current price of $608.85 sits at approximately 90% of the 52-week range (low $433.00, high $674.19), indicating strong momentum but also proximity to potential resistance. This positioning near the highs suggests bullish sentiment, though it also raises the risk of overextension, especially given the stock's beta of 0.901, which indicates slightly lower volatility than the market.
Beta
—
—
Max Drawdown
-20.1%
Largest decline past year
52-Week Range
$433-$674
Price range past year
Annual Return
+33.0%
Cumulative gain past year
| Period | DE Return | S&P 500 |
|---|---|---|
| 1m | +6.6% | +2.5% |
| 3m | +22.4% | +2.7% |
| 6m | -2.3% | +11.1% |
| 1y | +33.0% | +20.5% |
| ytd | +38.7% | +12.3% |
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DE Fundamental Analysis
Deere's revenue trajectory shows a recovery, with the most recent quarter (Q2 2026) reporting revenue of $13.369 billion, a 6.74% YoY increase, following a sequential rise from Q1's $9.611 billion. This growth is driven by strong demand in the Production & Precision Agriculture segment ($4.403 billion) and Small Agriculture ($2.339 billion), while Construction & Forestry remains a smaller contributor. The multi-quarter trend indicates a rebound from the cyclical trough, with revenue up from $12.525 billion in Q2 2025, suggesting the agricultural downturn may be easing.
Quarterly Revenue
$13.4B
2026-05
Revenue YoY Growth
+6.7%
YoY Comparison
Gross Margin
38.2%
Latest Quarter
Free Cash Flow
$3.8B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is DE Overvalued?
Given Deere's positive net income, the PE ratio is the primary valuation metric. The trailing PE is 24.89x, while the forward PE is 27.03x, indicating the market expects earnings to slightly decline, which is unusual for a growth stock. This gap suggests cautious expectations, possibly due to cyclical concerns. Compared to the industry average PE of 22x (from valuation data), Deere trades at a 13% premium, reflecting its market leadership and technology edge, but the premium may be justified by its superior margins and ROE of 19.37%.
PE
24.9x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 10x~38x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
15.5x
Enterprise Value Multiple
Investment Risk Disclosure
Financially, Deere carries a high debt-to-equity ratio of 2.46x, which amplifies interest expense (over $700M per quarter) and reduces net income. The company's reliance on a cyclical end-market means revenue and earnings can swing sharply; for instance, Q1 2026 revenue was $9.6B, but Q2 jumped to $13.4B, illustrating volatility. Additionally, the forward PE exceeding the trailing PE suggests the market expects earnings to decline, which could lead to valuation de-rating if not realized. Cash flow generation remains positive (FCF TTM of $3.77B), but debt service and capital expenditures consume a significant portion.
FAQ
The key risks for DE are: 1) Cyclicality: Agricultural equipment demand is highly cyclical, and a downturn could significantly reduce revenue and earnings. The 52-week low of $433.00 is 29% below the current price, illustrating potential downside. 2) High debt: Debt-to-equity of 2.46x increases financial risk, especially if interest rates rise. 3) Competitive pressure: Caterpillar's entry into autonomous tractors could intensify competition. 4) Geopolitical and input costs: Rising fertilizer costs due to the Iran conflict could squeeze farmer incomes and reduce equipment purchases. These risks are ranked by severity, with cyclicality being the most significant.
The 12-month forecast for DE is moderately bullish. The base case (50% probability) sees the stock reaching $620-$680, aligning with the average analyst target of $647.62. The bull case (30% probability) targets $700-$812, driven by a strong cyclical recovery and successful AI adoption. The bear case (20% probability) sees the stock falling to $500-$560 if a downturn occurs. The most likely scenario is the base case, assuming the agricultural cycle continues its gradual recovery. Key assumptions include revenue growth of 5-7% and stable margins. Investors should watch for earnings beats and guidance raises to shift probabilities toward the bull case.
DE is trading at a premium to its industry peers, with a trailing PE of 24.89x versus the industry average of 22x, representing a 13% premium. This premium is justified by Deere's superior ROE (19.37%) and operating margin (22.48%). However, the forward PE of 27.03x is higher than the trailing, indicating the market expects earnings to decline, which could be a red flag. Historically, DE has traded at a similar premium, so it is not overvalued relative to its own history. The market is pricing in a cyclical recovery, and if that fails, the stock could de-rate. Overall, DE is fairly valued given its growth prospects, but not a bargain.
DE is a good buy for investors seeking exposure to the agricultural sector with a growth tilt. The stock offers a +6.4% upside to the average analyst target of $647.62, and the consensus rating is Buy. However, the valuation is not cheap at 24.89x trailing PE, and the forward PE of 27.03x suggests earnings may decline. The biggest downside risk is a cyclical downturn, which could push the stock to $500 (analyst low). For long-term investors who believe in the AI-driven agriculture story, DE is a solid addition, but for short-term traders, the stock's volatility (beta 0.9) and proximity to 52-week high may limit upside.
DE is better suited for long-term investment (3-5 years) due to its cyclical nature and growth potential. The stock's beta of 0.901 indicates lower volatility than the market, but it can still experience significant swings based on agricultural cycles. The dividend yield of 1.37% provides some income, but the main upside comes from earnings recovery and AI-driven growth. Short-term trading is possible, but the stock's proximity to its 52-week high (90% of range) suggests limited immediate upside. For long-term investors, the current valuation is acceptable, and the company's market leadership and technology investments should drive value over time. A minimum holding period of 3 years is recommended to ride out cyclical fluctuations.