Deere Powers Ahead: Q2 Beat, Analyst Boosts, More Upside

Core Insights - Deere & Company is expected to see its stock price rise by 20% or more in 2025, driven by strong Q2 results, positive guidance, and robust capital returns [1] - Analysts have responded positively, with 20 analysts tracking the stock, nine of whom revised their price targets upward within 24 hours of the report [2][3] - The average price target is $561, which is 20% above the pre-release consensus and 10% above the previous all-time high [3] Financial Performance - Q2 revenue contracted by 16.3%, but this was significantly better than analysts' expectations, outperforming consensus by 1600 basis points [8] - The Production and Precision Agriculture and Construction and Forestry segments showed resilience, contracting by only 6% and 1%, respectively, while Small Ag and Turf contracted by 23% [8] - Despite margin contraction due to deleveraging and cost pressures, the company reported a net income of $1.84 billion, which is sufficient to maintain a cash-flow positive quarter [9] Capital Returns - Deere & Company has a dividend yield of 1.22% and an annual dividend of $6.48, with a strong track record of dividend increases over the past four years [10] - The capital return in Q2 included dividends and share repurchases, resulting in a 1.26% yield and a 2.2% reduction in share count [10] - The company maintains a strong balance sheet with increased cash, decreased liabilities, and a 7% increase in equity for the quarter [10] Market Sentiment - Technical signals indicate a bullish market trend, with new highs and positive crossovers in MACD and stochastic indicators [4] - The stock forecast shows a 12-month price target of $504.38, with a high forecast of $619.00 and a low forecast of $389.00 [7] - Following the Q2 report, the stock price initially surged nearly 10%, indicating strong market support [12]