Deere & Company
DE
$675.74
-0.32%
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, Small Agriculture & Turf, Construction & Forestry, and Financial Services. As the dominant player in the global ag equipment market, Deere is distinguished by its extensive dealer network and its strategic pivot toward precision agriculture and autonomous machinery, positioning it as a technology leader in the sector. The current investor narrative centers on a potential cyclical recovery in farm incomes and equipment demand, with recent earnings beats and raised guidance fueling optimism, while concerns about input costs and the pace of the ag recovery create debate about the sustainability of the stock's rally to all-time highs.…
DE
Deere & Company
$675.74
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Investment Opinion: Should I buy DE Today?
Based on the analysis, DE is rated a Hold. The consensus recommendation is 'Buy' with an average target of $673.98, but the stock is currently trading above that target, implying limited upside. The thesis is that Deere is a high-quality cyclical leader with improving near-term fundamentals, but the valuation already reflects much of the good news, leaving little margin of safety.
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DE 12-Month Price Forecast
The AI model assesses DE as a bullish opportunity with medium confidence. The recent earnings beat and raised guidance suggest the cyclical trough may be behind, and the company's leadership in precision agriculture positions it for long-term growth. However, the valuation is not cheap, and the forward PE indicates expected earnings decline, which introduces uncertainty. The model would upgrade to high confidence if revenue growth sustains above 5% for two consecutive quarters and if forward estimates are revised upward. Conversely, a downgrade to neutral would occur if revenue growth turns negative or if the stock breaks below its 200-day moving average.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Deere & Company's 12-month outlook, with a consensus price target around $685.19 and implied upside of +1.4% versus the current price.
Average Target
$685.19
0 analysts
Implied Upside
+1.4%
vs. current price
Analyst Count
—
covering this stock
Price Range
$500 - $813
Analyst target range
Deere is covered by 22 analysts, with a consensus recommendation of 'Buy' (mean rating of 2.04 on a scale where 1 is Strong Buy and 5 is Sell). The average price target is $673.98, which is 2.8% below the current price of $693.53, implying a slight downside. The distribution of ratings is not provided, but the recommendation mean suggests a bullish tilt. The target range spans from a low of $500 to a high of $804, indicating significant uncertainty about the company's future prospects.
Bulls vs Bears: DE Investment Factors
Deere presents a balanced but slightly bullish case. The bull case is anchored by a clear revenue inflection (+6.74% YoY in Q2), strong margins (22.5% operating), and a dominant market position with technological leadership. The bear case hinges on valuation concerns (forward PE above trailing), a cautious management outlook for the core ag business, and high leverage. The most important tension is whether the recent revenue acceleration marks a durable cyclical recovery or merely a temporary bounce. If the recovery is real, the stock could re-rate higher; if not, the premium valuation leaves room for significant downside. Currently, the weight of evidence—improving fundamentals, analyst buy consensus, and strong momentum—favors the bulls, but the stock's proximity to its average target suggests patience is needed for entry.
Bullish
- Revenue Growth Reaccelerating: Q2 2026 revenue grew 6.74% YoY to $13.37B, a sharp turnaround from the prior quarter's 16.3% decline. This sequential acceleration suggests the agricultural equipment cycle may be bottoming, with strength in Production & Precision Ag and Small Ag segments.
- Strong Profitability and Margins: Operating margin improved to 22.5% in Q2 2026 (from 16.2% in Q1), and net margin reached 13.3%. ROE stands at a robust 19.4%, demonstrating efficient capital deployment and pricing power despite cyclical headwinds.
- Market Leadership and Tech Edge: As the world's largest ag equipment maker with over 2,000 dealer locations in North America, Deere's scale and investments in precision agriculture and autonomous machinery create a durable competitive moat. This justifies its premium valuation versus peers.
- Analyst Consensus is Buy: 22 analysts rate DE a 'Buy' with a mean rating of 2.04 (1=Strong Buy). The average price target of $673.98 is only 2.8% below the current price, but the high target of $804 implies 16% upside, reflecting optimism about the cycle recovery.
Bearish
- Forward PE Signals Earnings Decline: The forward PE of 30.57x is higher than the trailing PE of 24.89x, implying the market expects earnings to fall in the coming year. This is unusual for a stock in an uptrend and suggests analysts' forward estimates are conservative or that a cyclical trough is still ahead.
- Stock Trades Above Average Target: At $693.53, the stock is 2.8% above the average analyst target of $673.98. This suggests limited near-term upside based on consensus, and any negative surprise could trigger a correction.
- High Debt-to-Equity Ratio: Debt-to-equity stands at 2.46x, reflecting significant leverage, partly due to its financial services segment. This amplifies risk if the ag downturn deepens or interest rates remain high, increasing financing costs.
- Cyclical Vulnerability and Input Costs: The core large agriculture business remains under pressure, with management giving cautious guidance. Rising fertilizer costs due to the Iran conflict and potential farm income weakness could dampen equipment demand.
DE Technical Analysis
Deere's stock is in a robust uptrend, with a 1-year price change of +46.04%, significantly outperforming the S&P 500's +18.65% over the same period. The current price of $693.53 sits near the top of its 52-week range, at approximately 98.3% of the high of $705.88, indicating strong momentum and bullish sentiment. This positioning near the highs suggests the market is rewarding the company's improving fundamentals, though it also raises the risk of short-term overextension.
Beta
0.91
0.91x market volatility
Max Drawdown
-20.1%
Largest decline past year
52-Week Range
$433-$706
Price range past year
Annual Return
+41.8%
Cumulative gain past year
| Period | DE Return | S&P 500 |
|---|---|---|
| 1m | +9.0% | -1.1% |
| 3m | +17.0% | +3.0% |
| 6m | +17.0% | +15.4% |
| 1y | +41.8% | +16.2% |
| ytd | +44.8% | +12.1% |
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DE Fundamental Analysis
Deere's revenue trajectory shows a mixed but improving picture. In the most recent quarter (Q2 2026, ending May 3, 2026), revenue was $13.37 billion, up 6.74% year-over-year, a notable acceleration from the prior quarter's 16.3% decline (Q1 2026 revenue of $9.61 billion vs. $8.26 billion in Q1 2025). The sequential improvement is driven by strength in Production & Precision Ag (PPA) and Small Ag segments, which saw revenue of $4.40 billion and $2.34 billion, respectively, in the latest quarter. However, the company's guidance for the core large agriculture business remains cautious, reflecting ongoing cyclical pressures in the sector.
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 most appropriate valuation metric. The trailing PE stands at 24.89x, while the forward PE is 30.57x, indicating that the market expects earnings to decline in the coming year, which is unusual for a stock in an uptrend. This gap suggests that analysts' forward estimates may be conservative or that the market is pricing in a cyclical trough in earnings. Compared to the industry average PE of 22x (based on available data), Deere trades at a 13% premium, reflecting its market leadership and technology investments, but the premium is modest given its strong competitive position.
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
Financial and operational risks are notable. Deere's debt-to-equity ratio of 2.46x is high, reflecting its captive finance arm, but this also means higher interest expenses (over $700M per quarter) that could pressure earnings if rates stay elevated. The company's net margin of 11.3% (TTM) is respectable but has been volatile, swinging from 14.4% in Q2 2025 to 6.8% in Q1 2026, indicating sensitivity to input costs and product mix. Revenue concentration in agriculture (PPA and SAT segments) exposes the company to farm income cycles; a prolonged downturn could lead to inventory build-ups and discounting, eroding margins. Free cash flow of $3.77B TTM is positive but could shrink if the cycle turns, limiting capital returns.
FAQ
The key risks are: (1) Cyclical downturn in agriculture, which could reduce demand for equipment and hurt revenue and margins. (2) High debt levels (debt-to-equity of 2.46x) could strain the balance sheet if earnings fall. (3) Competitive pressure from companies like Caterpillar entering the autonomous tractor market. (4) Macro risks such as rising interest rates, which increase financing costs for both Deere and its customers. The most severe risk is a prolonged recession, which could cause the stock to drop by 30-40% from current levels.
The 12-month forecast for DE is moderately bullish. The base case, with a 50% probability, sees the stock trading in the $650-$720 range, near the average analyst target of $673.98. The bull case, with a 30% probability, could push the stock to $750-$804 if the recovery accelerates. The bear case, with a 20% probability, could see the stock fall to $500-$550 if the downturn persists. The most likely scenario is a continued moderate recovery, with the stock consolidating around current levels before moving higher.
DE is fairly valued relative to its history and peers. The trailing PE of 24.89x is above the industry average of 22x, indicating a premium for its market leadership and growth prospects. However, the forward PE of 30.57x suggests that earnings are expected to decline, which is a warning sign. The stock's price-to-sales ratio of 2.80x is also above the market average. Overall, the market is pricing in a cyclical recovery, but not a boom. If the recovery is stronger than expected, the stock could be undervalued; if it disappoints, it is overvalued.
DE is a good stock to buy for long-term investors who believe in the agricultural cycle recovery and Deere's technological leadership. The stock has strong momentum, with a 46% gain over the past year, and analysts have a Buy consensus. However, at $693.53, it is trading slightly above the average analyst target of $673.98, implying limited near-term upside. The biggest risk is a cyclical downturn, which could cause the stock to fall to its 52-week low of $433, a 37.6% drop. Therefore, it is a better buy on pullbacks or for investors with a 3-5 year horizon who can ride out volatility.
DE is more suitable for long-term investment due to its cyclical nature and the time required for the agricultural recovery to fully play out. The stock has a beta of 0.91, making it slightly less volatile than the market, but it can still experience significant swings. The company pays a dividend with a yield of 1.37%, providing some income while waiting for capital appreciation. For short-term traders, the stock's momentum could offer opportunities, but the risk of a pullback is high given its proximity to all-time highs. A minimum holding period of 3-5 years is recommended to ride out the cycle and benefit from Deere's technological investments.