Deere & logged a -1.0% change during today's morning session, and is now trading at a price of $400.48 per share.
Deere & returned gains of 5.7% last year, with its stock price reaching a high of $420.47 and a low of $340.2. Over the same period, the stock underperformed the S&P 500 index by -24.1%. The company's 50-day average price was $404.36. Deere & Company engages in the manufacture and distribution of various equipment worldwide. Based in Moline, IL, the Large-Cap Industrials company has 83,000 full time employees. Deere & has offered a 1.4% dividend yield over the last 12 months.
Growing Revenues and Generally Positive Cash Flows:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $37,358 | $39,258 | $35,540 | $44,024 | $52,577 | $61,251 |
| Operating Margins | 12% | 11% | 12% | 18% | 18% | 21% |
| Net Margins | 6% | 8% | 8% | 14% | 14% | 17% |
| Net Income (M) | $2,368 | $3,253 | $2,751 | $5,963 | $7,131 | $10,166 |
| Net Interest Expense (M) | $1,204 | $1,466 | $1,247 | $993 | $1,062 | $2,453 |
| Depreciation & Amort. (M) | $754 | $779 | $800 | $2,050 | $1,895 | $2,004 |
| Diluted Shares (M) | 327 | 321 | 317 | 314 | 306 | 294 |
| Earnings Per Share | $7.24 | $10.15 | $8.69 | $18.99 | $23.28 | $34.63 |
| EPS Growth | n/a | 40.19% | -14.38% | 118.53% | 22.59% | 48.75% |
| Avg. Price | $138.75 | $152.96 | $179.64 | $341.71 | $366.37 | $398.44 |
| P/E Ratio | 18.9 | 14.88 | 20.48 | 17.85 | 15.64 | 11.45 |
| Free Cash Flow (M) | $926 | $2,292 | $6,663 | $6,878 | $3,565 | $7,091 |
| CAPEX (M) | $896 | $1,120 | $820 | $848 | $1,134 | $1,498 |
Deere & has growing revenues and increasing reinvestment in the business and strong operating margins with a positive growth rate. Additionally, the company's financial statements display exceptional EPS growth and generally positive cash flows.
a Decline in Expected Earnings Clouds Its Value Outlook but Priced Beyond Its Margin of Safety:
Deere & has a trailing twelve month P/E ratio of 13.8, compared to an average of 25.42 for the Industrials sector. Based on its EPS guidance of $22.17, the company has a forward P/E ratio of 18.2. According to the 17.3% compound average growth rate of Deere &'s historical and projected earnings per share, the company's PEG ratio is 0.8. Taking the weighted average of the company's EPS CAGR and the broader market's 5-year projected EPS growth rate, we obtain a normalized growth rate of 12.7%. On this basis, the company's PEG ratio is 1.09. This implies that the shares are fairly valued. In contrast, Deere & is likely overvalued compared to the book value of its equity, since its P/B ratio of 4.75 is higher than the sector average of 3.2. The company's shares are currently trading 66.6% below their Graham number. Ultimately, Deere &'s strong cash flows, decent earnings multiple, and healthy debt levels factor towards it being fairly valued, its elevated P/B ratio notwithstanding.
Deere & Has an Analyst Consensus of Some Upside Potential:
The 22 analysts following Deere & have set target prices ranging from $340.0 to $496.0 per share, for an average of $418.09 with a buy rating. The company is trading -4.2% away from its average target price, indicating that there is an analyst consensus of some upside potential.
Deere & has an average amount of shares sold short because 2.0% of the company's shares are sold short. Institutions own 80.2% of the company's shares, and the insider ownership rate stands at 0.17%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 8% stake in the company is worth $8,753,459,000.
