DE Stock Risk & Deep Value Analysis
Deere & Co
Industrials • Farm & Heavy Construction Machinery
DVR Score
out of 10
What You Need to Know About DE Stock
We analyzed Deere & Co using our deep value framework. Sign in to see our full verdict and DVR Score.
We ran DE through our deep value framework — analyzing financial health, distress signals, competitive moat, and risk factors. Our risk assessment: Moderate. Here's what we found.
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Weekly adjusted close · Quarterly revenue & EPS · DVR score history
DE Risk Analysis & Red Flags
What Could Go Wrong
The biggest risk for Deere right now is a deeper and prolonged downturn in U.S. & Canada Large Agriculture equipment demand, which already saw operating profit fall 39% in Q2 2026. If this segment continues to decline at a double-digit rate through FY2027, it could significantly impact overall revenue and necessitate a downward revision of the $4.5B-$5.0B FY2026 net income guidance.
Risk Matrix
Overall
Moderate
Financial
Low
Market
Medium
Competitive
Medium
Execution
Medium
Regulatory
Medium
Red Flags
- ⚠
Insider selling: Chairman & CEO John C. May sold 52,578 shares for an estimated $26.35 million in the last 6 months, with zero insider purchases reported.
- ⚠
Declining profitability in core segment: Production & Precision Agriculture operating profit decreased by 39% YoY in Q2 FY2026.
- ⚠
Right-to-repair lawsuit: A recent $99 million settlement, while manageable, signals ongoing regulatory and public pressure in a key aspect of their business model.
Upcoming Risk Events
- 📅
Further and sustained decline in U.S. & Canada Large Ag demand beyond the projected 15-20% for FY2026, leading to a downgrade in FY2027 net income guidance.
- 📅
Intensified regulatory or legislative action globally regarding the 'right-to-repair', potentially increasing compliance costs and impacting aftermarket service revenue by 3-5% annually from 2027.
When to Reconsider
- 🚪
Exit if Production & Precision Agriculture segment sales decline by more than 25% for two consecutive quarters, indicating a deeper cyclical downturn.
- 🚪
Sell if the company's net income guidance for FY2027 is revised downwards by more than 10% from the current FY2026 range of $4.5 billion to $5.0 billion.
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What Does Deere & Co (DE) Do?
Market Cap
$142.22B
Sector
Industrials
Industry
Farm & Heavy Construction Machinery
Employees
75,800
Deere & Company engages in the manufacture and distribution of various equipment worldwide. The company operates through four segments: Production and Precision Agriculture, Small Agriculture and Turf, Construction and Forestry, and Financial Services. The Production and Precision Agriculture segment provides large and mid-size tractors, combines, cotton pickers and strippers, sugarcane harvesters and loaders, soil preparation, tillage, seeding, and crop care equipment, as well as application equipment, including sprayers and nutrient management, soil preparation machinery for grain growers, and related attachments and service parts. The Small Agriculture and Turf segment offers rotary mowers, hay and forage equipment, forage harvesters, utility tractors, and related loaders and attachments; turf and utility equipment, including riding lawn, commercial mowing, and golf course equipment, and utility vehicles; and other outdoor power products, as well as implements for mowing, tilling, snow and debris handling, aerating, residential, commercial, golf, and sports turf care applications. The Construction and Forestry segment provides backhoe loaders, crawler dozers and loaders, four-wheel-drive loaders, track loaders, excavators, motor graders, articulated dump trucks, landscape and skid-steer loaders, scraper systems, milling machines, recyclers, slipform and asphalt pavers, surface miners, compactors, tandem, static rollers, mobile crushers and screens, mobile and stationary asphalt plants, log skidders and harvesters, log feller bunchers, and log loaders and forwarders; and road building and rehabilitation equipment. The Financial Services segment finances sales and leases agriculture and turf, and construction and forestry equipment. It also offers wholesale financing to dealers of the foregoing equipment; and extended equipment warranties, as well as finances retail revolving charge accounts. The company was founded in 1837 and is headquartered in Moline, Illinois.
Visit Deere & Co WebsiteInvestment Thesis
If Deere leverages its existing market leadership and deep customer relationships to accelerate the monetization of its precision agriculture and autonomous solutions, achieving consistent mid-single-digit (5-7%) revenue growth with expanding software and service margins by FY2029, then the company could sustain a premium valuation multiple (30-35x P/E) as it transforms into a hybrid industrial-technology leader. This is bullish because the market often undervalues the long-term recurring revenue potential from technology integration in traditional industrial sectors.
Is DE Stock Undervalued?
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DE Price Targets & Strategy
12-Month Target
$625.00
Bull Case
$672.00
Bear Case
$500.00
Valuation Basis
Based on 35x forward P/E applied to an estimated $17.58 FY2026 EPS (midpoint of management guidance / estimated shares outstanding).
Entry Strategy
Consider dollar-cost averaging in the $500-$520 range, which could represent a re-test of recent support levels if market sentiment on large agricultural equipment softens further.
Exit Strategy
Take profit on 50% of position at $650; consider a stop-loss order if the price falls below $480, signaling a deeper pullback in cyclical demand.
Portfolio Allocation
2% for conservative risk tolerance given the company's stability, but 0% for high-risk, 10x growth-focused portfolios.
Price Targets & Strategy
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Is DE Financially Healthy?
Valuation
P/E Ratio
29.73
Forward P/E
31.30
EV/EBITDA
15.50
PEG Ratio
5.50
Price/Book
6.00
Price/Sales
4.00
Profitability
Gross Margin
36.57%
Operating Margin
19.29%
Net Margin
10.09%
Return on Equity
18.25%
Revenue Growth
4.01%
EPS
$17.65
Balance Sheet
Current Ratio
0.91
Quick Ratio
0.69
Debt/Equity
2.46
Cash Flow
Free Cash Flow
$3.23B
Other
Beta (Volatility)
0.93
Dividend Yield
1.22%
Does DE Have a Competitive Moat?
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🏰 Wide
Moat Trend
Expanding
Moat Sources
4 Identified
Deere's moat is highly durable, built on over a century of brand equity, a vast and entrenched dealer network, and continuous investment in advanced technology. The integration of precision agriculture and autonomous solutions creates significant switching costs for farmers who are heavily invested in the Deere ecosystem, making it challenging for competitors to replicate.
Moat Erosion Risks
- •Increased regulatory pressure and 'right-to-repair' legislation that could dilute proprietary service and parts revenue, impacting high-margin streams.
- •Disruption from open-source hardware/software or agile tech startups that could chip away at specific precision agriculture niches without having to build a full equipment platform.
DE Competitive Moat Analysis
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DE Market Intelligence
Sentiment & Insider Activity
Social Sentiment
Neutral (Consistent sentiment for a large-cap industrial, no significant retail fervor mentioned).
Institutional Sentiment
Positive (Analyst consensus is 52% Buy/48% Hold; institutional ownership is high, with Vanguard reporting 7.04% as of 2026-03-31).
Insider Activity (Form 4)
Chairman & CEO John C. May sold 52,578 shares for an estimated $26.35 million in the last 6 months; total insider transactions show 0 purchases and 6 sales in this period.
Options Flow
Normal options activity (No specific unusual activity or significant put/call ratio skew was indicated in the research).
Earnings Intelligence
Next Earnings
Estimated late August 2026 (for Q3 FY2026)
Surprise Probability
Medium (Q2 beat estimates, but cautious outlook on large agriculture demand could temper expectations for Q3).
Historical Earnings Pattern
Historically, Deere tends to see moderate stock price reactions (typically +/- 3-5%) on earnings beats or misses, with greater volatility tied to changes in forward guidance, particularly regarding cyclical demand.
Key Metrics to Watch
Competitive Position
Top Competitor
Caterpillar
Market Share Trend
Stable to gaining in select high-growth areas like small agriculture, construction technology, and precision agriculture solutions, while navigating softness in large agriculture equipment.
Valuation vs Peers
Deere is currently trading at a premium to many of its pure-play agricultural equipment peers (e.g., AGCO, CNH Industrial) on a P/E basis (29.98 vs. 10-15x typically), reflecting its market leadership, brand strength, and technology investments. It's more comparable to diversified industrials like Caterpillar but still commands a higher multiple in agricultural tech.
Competitive Advantages
- •Unparalleled Brand Power and customer loyalty, particularly in agriculture.
- •Extensive Global Dealer Network providing strong distribution and service support.
- •Leading Intangible Assets/IP in precision agriculture and autonomous technologies.
- •Significant Switching Costs for farmers integrated into Deere's digital ecosystem.
Market Intelligence
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Earnings Call Report
Latest quarter — transcript highlights, guidance, and DVR overlay
Plain-language summary, key numbers, segment breakdown, and bull/bear signals from the most recent earnings call.
DE Latest Earnings Call Breakdown
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What Could Drive DE Stock Higher?
Near-Term (0-6 months)
- •Q3 FY2026 Earnings Report (estimated late August 2026): Commentary on updated FY2026/FY2027 guidance and trends in Production & Precision Agriculture demand will be critical.
- •Successful integration and initial revenue contribution from Tenna LLC acquisition in Q3-Q4 FY2026, boosting Construction & Forestry segment growth.
Medium-Term (6-18 months)
- •Expansion of autonomous agriculture solutions into new major farming regions (e.g., specific states in Brazil or India) by Q4 FY2027, leading to a 5-10% increase in precision ag subscription revenue.
- •Significant progress on reducing manufacturing costs for new electric or alternative-fuel prototypes across construction and agriculture by mid-2027, potentially expanding addressable market for sustainable equipment.
Long-Term (18+ months)
- •Widespread global adoption of Deere's full-stack precision agriculture solutions (hardware + software + services) by 2029-2030, leading to a sustained shift towards a higher-margin recurring revenue model, potentially adding $1B-$2B in annual high-margin software/service revenue.
- •Deere's sustained leadership in autonomous heavy equipment, enabling significant market share gains in both agricultural and construction sectors by 2030, leading to a ~1.5x revenue multiple premium compared to traditional industrial peers.
Catalysts & Growth Drivers
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What's the Bull Case for DE?
- ✓
Watch quarterly 'Production & Precision Agriculture' segment operating profit; a return to YoY growth by FY2027 would indicate a strong cyclical recovery.
- ✓
Monitor the percentage of total revenue derived from recurring software/service subscriptions in precision agriculture; consistent growth above 15% YoY would validate the tech pivot.
Bull Case Analysis
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Competing with DE
See how Deere & Co compares to related companies
| Company | Market Cap | DVR Score | P/E | Revenue | Profit Margin | Rev Growth | |
|---|---|---|---|---|---|---|---|
Deere & Co DE | $142.2B | 0.3 | 29.7 | — | 10.1% | 4.0% | |
Caterpillar Inc CAT | $400.8B | 0.1 | 42.5 | $70.8B | 13.3% | 11.8% | Compare → |
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How Deere & Co Makes Money
Deere & Co. generates revenue by designing, manufacturing, and distributing a comprehensive range of heavy equipment for the agricultural, construction, and forestry industries globally. This includes machinery like tractors, combines, excavators, and loaders. In addition to equipment sales, the company also provides associated parts, maintenance services, and increasingly, high-tech precision agriculture and autonomous software solutions that help customers optimize operations and improve efficiency. Deere's financial services division offers leasing and financing options, complementing its core equipment sales and leveraging its extensive global dealer network and powerful brand.
Read Full Business Model BreakdownFAQ
What is the DVR Score for Deere & Co (DE)?
As of May 27, 2026, Deere & Co has a DVR Score of 0.3 out of 10, placing it in the "Distressed" category. This score is generated by our AI-powered deep value analysis framework that evaluates growth potential, financial health, competitive moat, and risk factors.
What is the market capitalization of Deere & Co?
Deere & Co's market capitalization is approximately $142.2B. The company operates in the Industrials sector within the Farm & Heavy Construction Machinery industry.
What ticker symbol does Deere & Co use?
DE is the ticker symbol for Deere & Co. The company trades on the NYQ.
What is the risk level for DE stock?
Our analysis rates Deere & Co's overall risk as Moderate. This assessment considers execution risk, market risk, financial risk, competitive risk, and regulatory risk. For a full breakdown, see the risk analysis section above.
What is the P/E ratio of DE?
Deere & Co currently has a price-to-earnings (P/E) ratio of 29.7. This is in line with broader market averages.
Does Deere & Co pay a dividend?
Yes, Deere & Co pays a dividend with a current yield of approximately 1.22%.
Is Deere & Co's revenue growing?
Deere & Co has reported revenue growth of 4.0%. The company is growing at a moderate pace.
Is DE stock profitable?
Deere & Co has a profit margin of 10.1%. The company is profitable but margins are modest.
How often is the DE DVR analysis updated?
Our AI-powered analysis of Deere & Co is refreshed regularly to incorporate the latest financial data, market conditions, and news. The most recent update was on May 27, 2026.
Important Disclaimer – Not Financial Advice
Deep Value Reports is an independent research platform for educational and informational purposes only. We are not financial advisors, investment advisors, or licensed professionals. The analysis, scores, and information provided on this page for DE (Deere & Co) should not be construed as personalized investment advice, a recommendation to buy or sell any security, or an offer to provide investment advisory services.
All investments involve risk, including the potential loss of principal. Past performance does not guarantee future results. Always conduct your own research, consider your financial situation, and consult with a qualified financial advisor before making any investment decisions.