It's been a great afternoon session for Deere & investors, who saw their shares rise 2.1% to a price of $446.65 per share. At these higher prices, is the company still fairly valued? If you are thinking about investing, make sure to check the company's fundamentals before making a decision.
a Very Low P/E Ratio but Its Shares Are Expensive:
Deere & Company engages in the manufacture and distribution of various equipment worldwide. The company belongs to the Industrials sector, which has an average price to earnings (P/E) ratio of 25.42 and an average price to book (P/B) ratio of 3.2. In contrast, Deere & has a trailing 12 month P/E ratio of 17.4 and a P/B ratio of 5.3.
Deere & has moved 23.3% over the last year compared to 31.2% for the S&P 500 — a difference of -7.9%. Deere & has a 52 week high of $447.5 and a 52 week low of $340.2.
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 | $446.65 |
| P/E Ratio | 18.9 | 14.88 | 20.48 | 17.85 | 15.64 | 12.83 |
| 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.
