Core Viewpoint - Deere's stock has experienced a decline, and upcoming earnings are expected to show significant drops in both EPS and revenue compared to the previous year [1][2]. Company Performance - Deere's stock closed at $410, reflecting a decrease of 0.79% from the previous day, underperforming the S&P 500's gain of 0.16% [1]. - The stock has dropped by 8.49% over the past month, which is slightly better than the Industrial Products sector's loss of 8.6% but worse than the S&P 500's loss of 2.7% [1]. Earnings Estimates - Analysts anticipate an EPS of $3.08 for the upcoming earnings report, indicating a 50.56% decline year-over-year [2]. - Revenue is projected to be $7.79 billion, reflecting a 25.71% decrease from the same quarter last year [2]. - For the full year, earnings are estimated at $19.57 per share and revenue at $38.87 billion, showing declines of 23.61% and 13.15%, respectively, from the previous year [3]. Analyst Sentiment - Changes in analyst estimates for Deere are crucial as they often indicate shifts in near-term business trends [4]. - Upward revisions in estimates suggest analysts' positive outlook on the company's operations and profit generation capabilities [4]. Valuation Metrics - Deere's Forward P/E ratio stands at 20.95, which is higher than the industry average of 17.5, indicating that Deere is trading at a premium [7]. - The PEG ratio for Deere is currently 1.75, aligning with the average PEG ratio of the Manufacturing - Farm Equipment industry [8]. Industry Context - The Manufacturing - Farm Equipment industry, part of the Industrial Products sector, holds a Zacks Industry Rank of 232, placing it in the bottom 8% of over 250 industries [9]. - The performance of individual industry groups is measured by the Zacks Industry Rank, with top-rated industries outperforming the bottom half by a factor of 2 to 1 [9].

Autonomous Technology Expansion - John Deere unveiled second-generation autonomous machines at CES 2025, targeting agriculture, construction, and commercial landscaping industries [1] - The new autonomy kit integrates advanced computer vision, AI, and cameras for improved navigation in complex environments [1] - Autonomy addresses skilled labor shortages across industries: 2.4 million unfilled farm jobs annually, 88% of contractors struggle with labor, and 86% of landscaping businesses face labor shortages [6] Product Innovations - Autonomous 9RX Tractor: Features 16 cameras for 360-degree field view, enabling farmers to multitask during tillage season [7] - Autonomous 5ML Orchard Tractor: Equipped with Lidar sensors for dense canopy navigation, with a battery-electric version planned [7] - 460 P-Tier Autonomous Articulated Dump Truck: Designed for quarry operations, handling repetitive material transport tasks [7] - Autonomous Battery Electric Mower: Compact design with 360-degree camera coverage for commercial landscaping [7] Technology Integration - Machines are managed through John Deere Operations Center Mobile, a cloud-based platform [5] - Users can access live video, data, and metrics, with remote notifications for job quality or machine health issues [5] - Select machines will be autonomy-ready from the factory, while others can be retrofitted with the second-generation perception system [4] Industry Impact - The technology aims to address critical labor shortages while improving productivity in essential industries [2] - Autonomous solutions support food production, infrastructure development, and landscaping services [2] - The company's technology stack enables safe autonomous operation in diverse environments [2] CES 2025 Presence - John Deere will showcase autonomous machines and cutting-edge technologies at booth 5016 in West Hall [8] - The company will participate in three panel discussions on technology's role in agriculture and farming [12]

Group 1 - Deere & Company is facing challenges with declining sales due to weak crop prices and growers postponing machinery upgrades [1] - Despite these challenges, the company has been effective in maintaining its profit margins [1]

Core Viewpoint - Deere & Co is positioned to benefit from rising grain prices, which historically correlate with increased profits and stock prices, making it a strong candidate for dividend growth investments [2][4]. Group 1: Dividend Strategy - The "Made for 2025" Dividend Plan focuses on identifying dividend stocks with potential for significant payout increases, particularly in the context of Deere's operations [1]. - Deere has returned a substantial 60% of its cash to shareholders through dividends and buybacks over the past two decades, contributing to its strong performance [5]. - The company has increased its dividend by 145% over the last 10 years, particularly during periods of rising wheat prices, enhancing shareholder value [5][7]. Group 2: Market Conditions - Current low wheat prices present a buying opportunity for investors, as historical trends indicate that troughs in wheat prices often precede upcycles in Deere's profits [3][6]. - Despite trading sideways since 2022, Deere's management remains optimistic about future agricultural price increases, recently raising the dividend by 10.2% [7]. Group 3: Business Operations - Deere is a key player in the agricultural, construction, and forestry equipment sectors, with a strong reputation for performance during favorable grain price conditions [2][4]. - The company has strategically deployed its cash to acquire new businesses and invest in its core operations, ensuring long-term growth and stability [5].

Financial Performance - In fiscal year 2024, the Production and Precision Agriculture (PPA) segment generated $20,834 million in net sales, accounting for 47% of total equipment operations net sales[10] - The Small Agriculture and Turf (SAT) segment achieved $10,969 million in net sales, representing 24% of total equipment operations net sales[10] - The Construction and Forestry (CF) segment reported $12,956 million in net sales, making up 29% of total equipment operations net sales[10] - The financial services segment's consolidated tangible net worth was reported at $6,226.2 million as of October 27, 2024[34] - The company's financial results are significantly influenced by the agricultural market business cycle and general economic conditions, with unfavorable conditions in fiscal year 2024 leading to lower sales volumes and higher credit losses[53] - In fiscal year 2024, the company experienced increased sales discounts and higher receivable write-offs, with expectations for these conditions to persist into fiscal year 2025[53] Product Development and Innovation - The company introduced the new S7 Series combines and updated 9RX tractors in fiscal year 2024, featuring advanced automation and new engine options[14] - The company is committed to delivering hybrid-electric and battery electric equipment solutions to reduce tailpipe emissions while maintaining power and performance[22] - The company has a significant investment in research and development to enhance product quality and performance, focusing on sustainable solutions and compliance with regulations[27] - The company is investing in a Solutions as a Service business model to enhance customer value and sustainability[9] - The company utilizes automation and machine learning in its products, which presents both significant benefits and risks, including potential legal liabilities related to data accuracy and privacy[75] Market and Economic Conditions - The company continues to face challenges from higher interest rates and decreasing crop prices, impacting agricultural equipment purchasing decisions[19] - The backlog orders for the Construction and Forestry (CF) segment decreased to approximately $2.2 billion as of October 27, 2024, down from $6.4 billion on October 29, 2023, indicating a decline in demand[31] - Changes in worldwide demand for food and renewable energy are likely to result in fluctuating agricultural commodity prices, directly impacting sales of agricultural equipment[56] - The company faces risks from geopolitical tensions, such as the Russia/Ukraine war, which have exacerbated market volatility and affected agricultural global production and demand levels[56] - High interest rates remain above recent norms, negatively impacting customer demand for equipment and the company's financing spreads[61] Sustainability and Environmental Compliance - The company aims to reduce CO2e emissions from its equipment and is developing fully autonomous, battery-powered agricultural tractors[9] - The company is committed to reducing its environmental footprint through its Leap Ambitions framework and is investing in new engine technologies and aftertreatment systems to comply with emissions regulations[35] - The company continues to monitor and review developing sustainability frameworks and global regulations to mitigate potential environmental liabilities[35] - Compliance with environmental regulations did not materially affect capital expenditures, earnings, or competitive position in fiscal year 2024, and no significant capital expenditures are expected for fiscal year 2025[35][36] - Regulatory changes related to greenhouse gas emissions could increase operating costs and affect the company's ability to sell products in certain markets[81] Supply Chain and Operational Risks - The company has encountered supply chain disruptions due to changes in the availability and prices of raw materials, leading to increased production costs and inefficiencies[56] - The company relies on suppliers for raw materials and components, and disruptions in the supply chain could adversely affect its ability to meet customer commitments[56] - The company anticipates potential future fluctuations in supply chain stability due to ongoing geopolitical and economic uncertainties[56] - The rationalization or restructuring of manufacturing facilities may lead to temporary production constraints and inventory fluctuations[60] - The company emphasizes long-term supplier relationships and proactive supply chain management to mitigate risks and ensure material availability[30] Employee Relations and Workforce Management - As of October 27, 2024, the company had approximately 75,800 employees, with 35,200 being full-time production employees[39] - Approximately 77% of U.S. production and maintenance employees are represented by unions, with collective bargaining agreements expiring between 2025 and 2027[39] - The company offers a variety of working arrangements, including flexible schedules and remote work, to support employee well-being[45] - The ability to attract and retain qualified employees is critical for executing business strategy, with workforce reductions potentially affecting morale and institutional knowledge[69] Legal and Compliance Issues - The company is subject to ongoing legal actions, including a class action lawsuit alleging monopolization in the repair services market for its agricultural equipment[82] - In fiscal year 2024, the company agreed to pay approximately $10.0 million to resolve charges related to violations of the Foreign Corrupt Practices Act (FCPA) due to improper payments by its subsidiary[79] - The company maintains a global compliance hotline for reporting potential violations of its Code of Business Conduct[40] - The company must manage costs and risks associated with product warranties, post-sale repairs, and potential regulatory penalties, which could impact financial results[84] Competitive Landscape - The competitive landscape includes major players such as Caterpillar Inc. and CNH Industrial N.V., with increasing competition from technology-focused companies[26] - The reliance on independent dealers for product distribution poses risks; unsuccessful dealer operations could adversely affect overall sales and revenue[66] - Strategic acquisitions and joint ventures may not yield expected benefits, with integration challenges potentially delaying returns on investment[68] Technology and Cybersecurity - The secure operation of information technology networks is critical to the company's business strategy, and any significant disruptions could harm its reputation and financial condition[73] - The company has not experienced significant cyber incidents that resulted in material business impact, but it continues to be a target of malicious cyber threats, which could compromise networks and stored information[73] - The company faces risks associated with disruptions in technology systems, which could adversely affect operations and sales[76] Customer Demand and Market Trends - Retail demand for turf and utility equipment is typically higher in the second and third fiscal quarters, influencing production and shipment schedules[20] - Unfavorable weather conditions and natural disasters can significantly impact agricultural production, thereby affecting demand for agriculture and turf equipment[58]

Core Points - Deere & Company declared a quarterly dividend of $1.62 per share, payable on February 10, 2025, to stockholders of record on December 31, 2024 [1] - The new quarterly dividend rate reflects an increase of 15 cents per share from the previous level of $1.47 [2]

Core Viewpoint - Deere's stock has reached an all-time high despite a significant decline in net income, indicating that market expectations may have been lower than actual performance [1][7]. Financial Performance - Deere's net income fell by over 30% in fiscal 2024, reporting $7.1 billion, down from an initial forecast of $7.75 billion to $8.25 billion [5]. - The company projects fiscal 2025 net income to be between $5 billion and $5.5 billion, representing a 26% decline from fiscal 2024 and a 48% decline from fiscal 2023 [5]. - Despite the decline, the projected net income for fiscal 2025 is still significantly higher than pre-pandemic levels, with a market cap of approximately $126.5 billion leading to a price-to-earnings ratio of about 24 [6]. Market Expectations - Expectations for Deere have been relatively low, allowing the stock to rally as the company exceeded these expectations [3][7]. - Analysts noted that Deere's comparable results may improve in the second half of fiscal 2024, potentially leading to slight growth [8]. Strategic Positioning - Deere's CEO highlighted that over 75% of its products sold in the U.S. are assembled domestically, positioning the company favorably against potential tariff increases on imported machinery [9]. - The company has a strong track record of reinvesting in technological innovations and returning capital to shareholders through dividends and stock buybacks [11][13]. Long-term Outlook - There is potential for a return to growth in fiscal 2026, which could make Deere's stock appear undervalued [10]. - Despite uncertainties in demand across its business units, Deere's innovative culture and industry leadership make it a compelling long-term investment [12][14].

Deere & Company (NYSE: DE ) reported Q4 and FY 2024 earnings last week. The market liked these quite a bit, and the stock shot up significantly. Deere was up more than 10% during the week; theBest Anchor Stocks helps you find the best quality stocks to outperform the market with the lowest volatility/growth ratio. We look for top-notch quality compounders, with solid growth and lower volatility than you would expect.Best Anchor Stocks picks have a track record of revenue growth combined with below-average v ...

Deere & Co (DE) reported robust fourth-quarter fiscal 2024 results, beating earnings and revenue estimates. However, the world's largest agricultural equipment maker under the iconic John Deere brand has given a downbeat outlook for fiscal 2025, reflecting some challenges ahead. But this has been unable to offset positive sentiments. Shares of Deere gained 8% at the close following the results. This has put ETFs with the largest allocation to this farm equipment giant in focus. These funds include iShares M ...

Deere & Co. DE shares inched higher in early trading on Friday, after the company reported upbeat fiscal fourth-quarter results.The company reported its results amid an exciting earnings season. Here are some key analyst takeaways.Goldman Sachs On Deere & Co.Analyst Jerry Revich maintained a Buy rating while raising the price target from $466 to $504.Deere's fiscal fourth-quarter results revealed sa ignificant inventory destock of $2.6 billion "to bring dealer inventories to levels approaching prior trough, ...