We came across an interesting article about Deere & Company on ShowMeTheValue’s Substack. In this article we will summarize Bill’s article on DE. Shares of Deere & Company are trading at $644.54 as of February 24. According to Yahoo Finance, DE’s trailing and leading P/E were 24.12 and 22.57, respectively.
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Deere & Company is involved in the manufacturing and distribution of various equipment worldwide. DE enters FY2025 on what appears to be a cyclical turf, positioning the company for a potential recovery as agricultural conditions stabilize. Headquartered in Moline, Illinois, Deere operates through two primary divisions: Equipment Operations and Financial Services, along with former Production and Precision Agriculture (PPA), Small Agriculture and Turf (SAT), and Construction and Forestry (CF). While financial services support the demand for equipment through customer financing, the main earning power remains in the operation of the equipment.
Like many industrial manufacturers focused on agriculture, Deere’s results are highly cyclical, closely tracking farm income and crop prices. After commodity price hikes in 2022, soybean, corn and wheat prices have normalized to 2019 levels, depressing farm incomes and leading to reduced equipment purchases. This dynamic has led to a decline in net sales from FY2023 to FY2025, although the latest quarterly data suggests that the rate of contraction is slowing, indicating that the bottom part of the cycle may be forming.
Despite the decline, Deere remains significantly larger in equipment operations than key agricultural competitors such as CNH Industrial and Kubota, with nearly double their scale. Specifically in agriculture, Deere experienced a 14% sales decline in FY2025, broadly in line with peers, although Europe-focused CLAAS showed more interest. In construction and forestry, Deere trails industry leaders such as Caterpillar and Komatsu in absolute size, but its competitive position remains strong in end markets.
Importantly, Deere’s stock is up nearly 75% through the end of 2020, outperforming many agricultural peers and signaling the market’s confidence in its structural advantages. With sales declining moderately, strong competitive scales, and cycle flexibility demonstrated, Deere appears to be well-positioned for revenue recovery as the agricultural economy stabilizes, making the current environment an attractive long-term entry point.
Previously, we covered a Fast article May 2025 by Best Anchor Stock in Deere & Company (DE), which highlighted the company’s resilience despite cyclical pressures, consistent earnings, aggressive acquisitions, and expansion of ag-tech innovations. DE’s stock price has appreciated by approximately 26.88% since our coverage. ShowMeTheValue shares a similar view but emphasizes cyclical trough dynamics and recovery potential.
