Deere & Company
DE
$592.67
-1.13%
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 a market leader with a robust dealer network spanning over 100 countries, Deere is distinct for its dominant position in the agricultural machinery industry and its growing focus on AI and autonomous technology. The current investor narrative centers on the potential bottoming of the agricultural equipment cycle, as evidenced by recent earnings beats and raised guidance, while also grappling with near-term headwinds such as rising input costs and geopolitical tensions affecting fertilizer prices. The stock's recent volatility reflects this tension between cyclical recovery optimism and ongoing macroeconomic uncertainties.…
DE
Deere & Company
$592.67
Related headlines
Investment Opinion: Should I buy DE Today?
Rating: Buy. Deere offers a compelling risk/reward at current levels, with a consensus Buy rating and average target of $648.03 implying 9.3% upside. The thesis is that the agricultural equipment cycle is bottoming, as evidenced by Q2 revenue growth of 6.74% and raised guidance, which should drive earnings recovery and multiple expansion.
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DE 12-Month Price Forecast
The AI assessment is bullish with medium confidence. Deere's recent earnings beat and raised guidance suggest the cycle is turning, and the company's dominant position in ag equipment provides a strong moat. However, the high valuation (24.9x trailing PE) and geopolitical risks warrant caution. If the cycle continues to improve and margins hold, DE could outperform; if not, the stock is vulnerable to a sharp correction. Key factors to monitor are quarterly revenue growth, margin trends, and management guidance.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Deere & Company's 12-month outlook, with a consensus price target around $648.03 and implied upside of +9.3% versus the current price.
Average Target
$648.03
0 analysts
Implied Upside
+9.3%
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' and a mean recommendation score of 2.125 (where 1 is Strong Buy and 5 is Sell). The average target price is $648.03, implying an upside of approximately 9.3% from the current price of $592.67. The distribution includes 10 Buy ratings, 8 Hold ratings, and 5 Sell ratings, indicating a generally bullish but cautious sentiment. The high target of $812 suggests that some analysts see significant upside potential, likely driven by expectations of a strong cyclical recovery and successful AI/autonomous technology adoption, while the low target of $500 reflects concerns about margin compression and competitive pressures. Recent ratings actions show a mix of Neutral and Buy ratings, with no major downgrades, indicating stability in sentiment. The wide range between low and high targets (312 points) signals high uncertainty about the pace of the agricultural cycle recovery and the impact of global economic conditions.
Bulls vs Bears: DE Investment Factors
Deere presents a classic cyclical recovery debate. Bullish evidence centers on accelerating revenue growth, improving margins, and a dominant market position, supported by a Buy consensus and 9.3% upside to the average target. Bearish concerns focus on elevated valuation (24.9x trailing PE), high debt (D/E 2.46), and geopolitical risks that could derail the recovery. Currently, the bull case has slightly stronger evidence given the recent earnings beat and raised guidance, but the key tension is whether the agricultural cycle has truly bottomed or if the Q2 rebound is a temporary bounce. If the cycle sustains, DE could re-rate higher; if it falters, the stock faces significant downside given its leverage and valuation.
Bullish
- Q2 Revenue Growth Accelerates: Q2 FY2026 revenue rose 6.74% YoY to $13.37B, a sharp rebound from Q1's -9.4% decline, signaling a potential cyclical bottom. Sequential improvement from $9.61B in Q1 to $13.37B in Q2 confirms momentum.
- Strong Analyst Consensus with Upside: 23 analysts rate DE a Buy with an average target of $648.03, implying 9.3% upside from $592.67. The high target of $812 suggests 37% potential if the cycle recovery accelerates.
- Dominant Market Position and AI Focus: As the world's leading ag equipment maker with a 2,000+ dealer network, DE is investing heavily in AI and autonomous tech, positioning it to lead industry innovation and capture long-term efficiency gains.
- Improving Profitability Metrics: Q2 gross margin expanded to 38.2% from 34.7% in Q1, and operating margin rose to 22.5% from 16.2%, reflecting better cost control and pricing power as volumes recover.
Bearish
- Elevated Valuation with Negative PEG: Trailing PE of 24.9x and forward PE of 26.1x are above historical averages, while the negative PEG (-0.89) suggests expected earnings decline, making the stock expensive if growth disappoints.
- High Debt Levels Increase Financial Risk: Debt-to-equity ratio of 2.46 is elevated, and interest expense of $712M in Q2 (up from $784M a year ago) pressures net income. High leverage amplifies cyclical downturns.
- Geopolitical and Input Cost Pressures: The Iran conflict is driving up fertilizer costs, raising farmers' input expenses and potentially dampening equipment demand. This was cited as a key concern in the latest earnings call.
- Mixed Analyst Sentiment with 5 Sells: Despite a Buy consensus, 5 of 23 analysts rate DE a Sell, and the low target of $500 implies 15.6% downside. The wide target range (500-812) reflects high uncertainty about cycle timing.
DE Technical Analysis
Deere's stock is in a broad uptrend over the past year, with a 1-year price change of +13.03%, though it has pulled back from its 52-week high of $674.19. Currently trading at $592.67, the stock sits at approximately 87.9% of its 52-week range (calculated as (592.67-433)/(674.19-433)), indicating it is closer to the highs but has room before reaching resistance. This positioning suggests a stock that has seen strong momentum but is currently in a corrective phase, which could be seen as a potential buying opportunity if the uptrend resumes.
Beta
0.90
0.90x market volatility
Max Drawdown
-20.1%
Largest decline past year
52-Week Range
$433-$674
Price range past year
Annual Return
+13.0%
Cumulative gain past year
| Period | DE Return | S&P 500 |
|---|---|---|
| 1m | -5.6% | +0.3% |
| 3m | +2.7% | +4.0% |
| 6m | +12.2% | +8.3% |
| 1y | +13.0% | +20.2% |
| ytd | +27.0% | +9.6% |
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DE Fundamental Analysis
Deere's revenue trajectory shows a mixed but generally improving picture. In the most recent quarter (Q2 2026, ending May 3, 2026), revenue was $13.369 billion, up 6.74% year-over-year, marking a recovery from the prior quarter's $9.611 billion (Q1 2026) which was down from Q2 2025's $12.525 billion. The multi-quarter trend shows sequential improvement from Q1 2026's revenue of $9.611 billion to Q2 2026's $13.369 billion, indicating a rebound. Revenue segments reveal that Production & Precision Agriculture (PPA) is the largest at $4.403 billion, followed by Small Agriculture at $2.339 billion, with Construction & Forestry contributing $2.167 billion, and Financial Products at $1.457 billion. This growth is driven by a recovery in the agricultural equipment cycle, though the company faces headwinds from rising input costs and geopolitical tensions.
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 26.07x, indicating that the market expects earnings to grow slightly, as the forward multiple is higher. This gap suggests modest growth expectations, which aligns with the cyclical recovery narrative. The stock's PEG ratio is negative at -0.89, which is unusual and may indicate that earnings growth is expected to be negative in the near term, or that the metric is distorted by cyclicality.
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 risks are significant. Deere's debt-to-equity ratio of 2.46 is high for an industrial, and interest expenses of $712M in Q2 (up from $784M a year ago) consume a large portion of operating income. The company's net margin of 11.3% is solid, but it is sensitive to volume swings; Q1 net income fell to $656M (7% margin) before recovering in Q2. Cash flow generation is positive (FCF TTM $3.77B), but the high payout ratio (34.2%) and capital-intensive nature limit flexibility. If the cycle turns down again, earnings could compress sharply, as seen in Q1 when EPS dropped to $2.43 from $3.20 a year earlier.
FAQ
The key risks are: (1) Financial: high debt-to-equity of 2.46 and interest expenses of $712M per quarter, which could strain earnings if the cycle turns down; (2) Market/Competitive: valuation compression risk if the stock re-rates to historical averages, and competitive threats from Caterpillar's autonomous tractors; (3) Macro: sensitivity to commodity prices and geopolitical tensions, such as the Iran conflict driving up fertilizer costs; (4) Company-specific: execution risk in AI and autonomous technology adoption. The most severe risk is a prolonged downturn in agricultural equipment demand, which could lead to a -27% decline to the 52-week low of $433.
Based on analyst targets and scenario analysis, DE is expected to trade between $433 and $812 over the next 12 months. The base case (50% probability) targets $620-$680, aligning with the average analyst target of $648. The bull case (30% probability) targets $700-$812, driven by a strong cyclical recovery and AI adoption. The bear case (20% probability) targets $433-$500, if the cycle fails and earnings disappoint. The most likely scenario is the base case, assuming moderate growth and stable margins.
DE is trading at a premium to its historical average, with a trailing PE of 24.9x versus a 5-year average of around 18x. The forward PE of 26.1x is also above the S&P 500's forward PE of ~22x. This premium reflects the market's expectation of a cyclical recovery and Deere's AI investments. However, the negative PEG ratio (-0.89) suggests that earnings growth is expected to be negative in the near term, which could make the stock overvalued if the recovery stalls. Overall, DE is fairly valued to slightly overvalued, but not excessively so given its market leadership.
DE is a good buy for investors with a medium-to-long-term horizon who believe the agricultural cycle is bottoming. The stock offers a 9.3% upside to the average analyst target of $648.03, and the recent earnings beat suggests improving fundamentals. However, the stock is not cheap at 24.9x trailing earnings, and there is a 15.6% downside to the low target of $500. For risk-tolerant investors, DE is a compelling cyclical play; for conservative investors, it may be better to wait for a pullback or confirmation of sustained growth.
DE is best suited for long-term investment (3-5 years) due to its cyclical nature and the ongoing transformation of agriculture through AI and automation. The stock has a beta of 0.90, indicating lower volatility than the market, but it can still experience significant swings based on commodity prices and economic conditions. Short-term trading is possible, but the stock's recent 5.6% monthly decline highlights its volatility. For long-term investors, the current valuation is reasonable if the cycle recovers, and the dividend yield of 1.37% provides a modest income cushion. A minimum holding period of 3 years is recommended to ride out cyclical downturns.