NYSE:DE
DEERE & CO
A premier manufacturer of agricultural and construction machinery known for high-margin technology integration in the farming sector.
Key Metrics
Investment Thesis
Bull Case
Investors should consider buying DE due to its ability to generate massive free cash flow ($7.46B) which funds significant shareholder returns via buybacks and dividends. The company's transition to autonomous farming technologies positions it well for long-term growth as precision agriculture adoption accelerates globally.
Bear Case
Potential buyers should avoid the stock due to a clear downward revenue trend, dropping from $61.25B in 2023 to $45.68B in 2025, indicating a cyclical downturn. High interest expenses of $3.17B significantly erode operating margins, and the substantial accumulated other comprehensive income loss suggests volatility in equity value.
About DEERE & CO
Deere & Company (NYSE: DE) is a global leader in precision agriculture, turf care, and construction equipment. The company serves farmers, ranchers, and contractors worldwide with its proprietary John Deere brand, offering tractors, combines, and autonomous farming solutions that integrate advanced data analytics and connectivity.
Analysis
Management Discussion
Management delivered $5.00B in net profit for the year, though revenue declined to $45.68B as the company navigates a cyclical downturn from its 2023 peak. Operating cash flow remained robust at $7.46B, allowing for substantial share repurchases of $1.14B and dividends of $1.72B despite higher interest expenses of $3.17B.
Industry Overview
The agricultural machinery industry is characterized by long product cycles tied to farm economic health and significant capital expenditure requirements for growers. Consolidation is rare due to high barriers to entry involving R&D costs for precision tech and extensive dealer relationships, creating a fragmented but stable landscape dominated by top players like DE.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | $61.25B | $51.72B | $45.68B |
| Cost of Revenue | $0 | $0 | $0 |
| Gross Profit | $61.25B | $51.72B | $45.68B |
| Operating Expenses | $48.29B | $42.68B | $39.43B |
| Operating Income | $12.96B | $9.04B | $6.26B |
| R&D | $2.18B | $2.29B | $2.31B |
| G&A | $4.59B | $4.84B | $4.66B |
| Stock-Based Comp | $130.0M | $208.0M | $151.0M |
| D&A | $2.00B | $2.12B | $2.23B |
| Amortization | $169.0M | $166.0M | $143.0M |
| Other OpEx | $41.52B | $35.55B | $32.45B |
| Non-Operating Income | $61.0M | $167.0M | $0 |
| Interest Expense | $2.45B | $3.35B | $3.17B |
| Pre-Tax Income | $13.02B | $9.21B | $6.26B |
| Income Tax | $2.87B | $2.09B | $1.26B |
| Continuing Ops | $10.15B | $7.11B | $5.00B |
| Discontinued Ops | $7.0M | $-24.0M | $0 |
| Net Income | $10.15B | $7.09B | $5.00B |
| Minority Interest | $-11.0M | $-12.0M | $-29.0M |
| Net to Common | $10.17B | $7.10B | $5.03B |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Cash & Equivalents | $7.46B | $7.32B | $8.28B |
| Inventory | $8.16B | $7.09B | $7.41B |
| Goodwill | $3.90B | $3.96B | $4.19B |
| Operating Leases | $283.0M | $274.0M | $317.0M |
| Total Assets | $104.09B | $107.32B | $106.00B |
| Total Liabilities | $82.20B | $84.39B | $79.99B |
| Shareholders' Equity | $21.89B | $22.93B | $26.01B |
| Retained Earnings | $50.93B | $56.40B | $59.68B |
| AOCI | $-3.11B | $-3.71B | $-3.03B |
| Total L&E | $104.09B | $107.32B | $106.00B |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Net Income (CFO) | $10.15B | $7.09B | $5.00B |
| Non-Cash Adjustments | $-6.09B | $4.37B | $4.13B |
| Working Capital Changes | $4.53B | $-2.23B | $-1.67B |
| Cash from Operations | $8.59B | $9.23B | $7.46B |
| Capital Expenditures | $1.50B | $1.64B | $1.36B |
| Cash from Investing | $-8.75B | $-6.46B | $-2.06B |
| Share Buybacks | $7.22B | $4.01B | $1.14B |
| Dividends Paid | $1.43B | $1.60B | $1.72B |
| Cash from Financing | $2.81B | $-2.72B | $-4.58B |
| FX Effect | $31.0M | $-37.0M | $77.0M |
| Net Change in Cash | $2.68B | $13.0M | $900.0M |
| Beginning Cash | $4.94B | $7.62B | $7.63B |
| Ending Cash | $7.62B | $7.63B | $8.53B |
Frequently Asked Questions
How does DEERE & CO make money?
The company's revenue is driven by three primary segments: Agriculture & Turf Care, which includes tractors and combines for crop production; Construction & Forestry, covering earthmoving and landscaping equipment; and Financial Services, providing financing solutions to its machinery customers.
What are the main risks for DE?
Cyclical demand from agriculture is heavily dependent on global crop prices, interest rates, and input costs like fuel and fertilizer. Significant exposure to foreign exchange fluctuations impacts reported earnings given the company's international sales volume. Supply chain disruptions for semiconductors and specialized steel could delay production of high-tech machinery.
What is DE's competitive advantage?
Deere maintains a dominant market share through its proprietary 'See & Spray' technology that reduces chemical usage in farming. The company benefits from high switching costs due to the seamless integration of its hardware with its specialized FieldJohn operating system. A robust dealer network and strong brand loyalty create a durable moat against generic competitors.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.