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IndustrialsDeere & Company
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XBRL · SEC EDGAR2010–2025(18yr)| Metric | FY 2010 | FY 2011 | FY 2012 | FY 2013 | FY 2014 | FY 2015 | FY 2015 | FY 2016 | FY 2016 | FY 2017 | FY 2018 | FY 2019 | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 | FY 2025Latest | YoY |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $26.0B | $32.0B | $36.2B | $37.8B | $36.1B | $28.9B | $28.9B | $26.6B | $26.6B | $29.7B | $37.4B | $39.3B | $35.5B | $44.0B | $52.6B | $61.3B | $51.7B | $45.7B | -11.7% |
| Gross Profit | $8.6B | $10.1B | $11.1B | $12.1B | $11.3B | $8.7B | $8.7B | $8.4B | $8.4B | $9.8B | — | — | — | — | — | — | — | — | — |
| Gross Margin | 33.1% | 31.5% | 30.8% | 32.1% | 31.3% | 30.2% | 30.2% | 31.5% | 31.5% | 33.0% | — | — | — | — | — | — | — | — | — |
| Operating Income | $3.4B | $4.6B | $5.1B | $5.9B | $5.2B | $3.1B | $3.1B | $2.6B | $2.6B | $3.5B | $4.5B | $4.4B | $4.3B | $8.0B | $9.5B | $13.0B | $9.0B | — | — |
| Operating Margin | 13.1% | 14.3% | 14.1% | 15.7% | 14.5% | 10.9% | 10.9% | 9.7% | 9.7% | 11.9% | 12.0% | 11.2% | 12.1% | 18.2% | 18.1% | 21.2% | 17.5% | — | — |
| Net Income | $1.9B | $2.8B | $3.1B | $3.5B | $3.2B | $1.9B | $1.9B | $1.5B | $1.5B | $2.2B | $2.4B | $3.3B | $2.8B | $6.0B | $7.1B | $10.2B | $7.1B | $5.0B | -29.2% |
| Net Margin | 7.2% | 8.7% | 8.5% | 9.4% | 8.8% | 6.7% | 6.7% | 5.7% | 5.7% | 7.3% | 6.3% | 8.3% | 7.7% | 13.5% | 13.6% | 16.6% | 13.7% | 11.0% | -2.7pp |
| Free Cash Flow | $1.5B | $1.3B | — | — | — | — | $3.1B | $3.1B | — | $1.6B | $923.9M | $2.3B | $6.7B | $6.9B | $3.6B | $7.1B | $7.6B | $6.1B | -19.7% |
| FCF Margin | 5.8% | 4.0% | — | — | — | — | 10.6% | 11.7% | — | 5.4% | 2.5% | 5.8% | 18.7% | 15.6% | 6.8% | 11.6% | 14.7% | 13.4% | -1.3pp |
| EPS (Diluted) | $4.35 | $6.63 | $7.63 | $9.09 | $8.63 | $5.77 | $5.77 | $4.81 | $4.81 | $6.68 | $7.24 | $10.15 | $8.69 | $18.99 | $23.28 | $34.63 | $25.62 | $18.50 | -27.8% |
1. THE BIG PICTURE
Deere & Company is currently a business in contradiction: it is marketing a future of "Solutions as a Service" and autonomous farming while its present reality is defined by a sharp cyclical contraction. While management claims 2026 will mark the "bottom" of this cycle, Deere & Company is currently trailing all major industrial peers in revenue growth and cash flow efficiency.
2. WHERE THE RISKS HIT HARDEST
The "Smart Industrial Operating Model" is threatened by "Agricultural Market Cyclicality" because the high-tech, precision tools Deere & Company is prioritizing require significant capital investment from farmers (10-K Item 1). When commodity prices fall and input costs rise, the very customers needed to fuel the transition to "Solutions as a Service" (SaaS) lack the income to upgrade.
Furthermore, the "best-in-class dealer channel" identified as a core strength is currently a source of friction due to "Inventory Management" risks (10-K Item 1). Elevated levels of used equipment in North America have forced Deere & Company to reduce price realization to clear lots, effectively turning its most important competitive barrier into a drag on profitability (Risks). Finally, the "Manufacturing Footprint" efficiency is being undermined by "Trade Policy and Tariffs," which directly increased costs by $600 million in 2025, highlighting a vulnerability in a business model that relies on being a net exporter from the U.S. (Risks).
3. WHAT THE NUMBERS SAY TOGETHER
The most recent quarterly data reveals a stark divergence between segments. While total sales rose 13%, operating profit in the flagship Production & Precision Agriculture (PPA) segment collapsed by 59% (8-K). This suggests that current growth is being driven by the Construction & Forestry segment—which saw a 111% profit surge—rather than the high-margin technology integration that defines the "Leap Ambitions" strategy.
When viewed against peers, Deere & Company’s financial position appears stretched. Its Free Cash Flow (FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders) margin of 3.4% is the lowest in its peer group, significantly trailing Caterpillar (14.5%) and Illinois Tool Works (16.5%) (XBRL). This low cash conversion is particularly notable given Deere & Company’s $25.6 billion in net debt, resulting in a net leverage ratio of 17.6x (CAPM analysis). While management characterizes this as a "transition point," the TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter revenue decline of -11.7% is the steepest among its competitors, suggesting the downturn is hitting Deere & Company harder than more diversified industrials like Eaton or Parker-Hannifin (XBRL).
4. IS IT WORTH IT AT THIS PRICE?
At 25.7x Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations, Deere & Company trades in line with the peer median (Yahoo Finance). According to the CAPM analysis, this price implies the market expects ~5.9% long-term growth.
This valuation appears to grant Deere & Company a "tech premium" that its current fundamentals do not yet support. Deere & Company’s actual TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter revenue growth is -11.7%, and management has admitted that SaaS revenue does not yet represent a significant portion of the total (10-Q). If Deere & Company cannot achieve the market-implied growth and instead grows at a GDP-pace of 2.5%, the justified multiple would fall to 13.7x—representing nearly 47% downside from current levels (CAPM analysis). For the current price to be "fair," the 2026 "bottom" must lead to an immediate and sustained recovery in high-margin precision agriculture sales.
5. WHAT WOULD CHANGE THIS VIEW?
- Constructive if SaaS revenue begins to represent a "significant percentage" of total revenue in upcoming 10-Q filings, proving that the transition to a recurring-revenue model is decoupling Deere & Company from the hardware cycle.
- Cautious if net leverage continues to rise above 17.6x or if the Construction & Forestry segment—currently the sole engine of profit growth—begins to decelerate (8-K).
- Cautious if ongoing antitrust litigation regarding repair services results in mandatory changes to service operations, which could threaten the high-margin parts and lifecycle solutions business (Risks).
6. BOTTOM LINE
Structural Advantage: The integration of a proprietary digital technology stack (John Deere Operations Center™) with a dominant, hardware-focused dealer network.
Bottom Line: Deere & Company is a high-leverage bet on a technological pivot that is being tested by a deep cyclical trough and a heavy debt load.
1. Top 5 Material Risks
- Agricultural Market Cyclicality: Deere & Company’s financial results depend on the agricultural business cycle, where negative conditions—such as lower commodity prices, high input costs, and reduced farm income—weaken demand for equipment and increase credit losses.
- Trade Policy and Tariffs: As a net exporter of equipment from the U.S., Deere & Company faces risks from tariffs and retaliatory trade barriers; in 2025, incremental import tariffs directly impacted Deere & Company by approximately $600 million.
- Inventory Management: Failure to accurately forecast demand leads to excess inventory or parts shortages; in 2025, elevated used inventory levels in North America forced Deere & Company to reduce price realization and take actions to lower inventory levels.
- Supply Chain Disruptions: Reliance on a complex global supply chain, including single-source suppliers and rare earth minerals sourced primarily from China, exposes Deere & Company to production delays, increased logistics costs, and potential manufacturing shutdowns.
- Interest Rate Volatility: Elevated interest rates increase the cost of carrying inventory for dealers and financing costs for end customers, which negatively impacted the market for agriculture, turf, and construction products in 2025.
2. Company-Specific Risks
- Smart Industrial Operating Model Execution: Deere & Company may fail to realize benefits from its strategic model if customers do not adopt precision technologies or SaaS subscription services, or if Deere & Company cannot effectively monetize these technology-based solutions.
- Dealer Network Dependency: Deere & Company relies on independent dealers to manage distribution; if dealers are unable to fund their own operations or fail to establish effective sales plans, it directly reduces Deere & Company’s sales and revenue.
- Digital System Reliability: The John Deere Operations Center™ stores substantial volumes of customer data; any security breach or system outage could compromise the integrity of customer operations and damage Deere & Company’s reputation.
- Product Performance and Recalls: Deere & Company faces significant expenses from warranty claims, post-sale repairs, and recalls when equipment fails to perform as expected, which can also lead to regulatory investigations and negative public perception.
3. Regulatory/Legal Risks
- Antitrust Litigation: Deere & Company is subject to a consolidated multidistrict class action lawsuit and a separate FTC-led lawsuit in the Northern District of Illinois alleging attempted monopolization and exclusionary conduct regarding repair services for agricultural equipment.
- International Trade Controls: Changes in U.S. export controls and sanctions on foreign countries could restrict Deere & Company’s ability to manufacture products abroad, collect receivables, or provide aftermarket warranty support.
- Climate Change Regulation: Legislative responses to GHG emissions could impose carbon pricing or require facility improvements, increasing operating costs through higher utility, transportation, and material expenses.
- Anti-Corruption Compliance: Deere & Company must comply with the U.S. Foreign Corrupt Practices Act (FCPA); despite existing compliance programs, violations by employees or agents could result in criminal or civil sanctions.
4. Financial Impact Map
Agricultural Market Cyclicality → Sales Volumes / Allowance for Credit Losses → Elevated delinquencies and decline in market conditions led to increased allowance for credit losses on retail notes and financing lease receivables in 2025.
Incremental Import Tariffs → Cost of Goods Sold / Manufacturing Profitability → Direct impact of $600 million in 2025, excluding impacts on suppliers and market demand.
Inventory Management → Price Realization / Inventory Levels → Elevated used inventory levels in 2025 resulted in lower price realization and necessitated inventory reduction actions.
Supply Chain Disruptions → Production and Overhead Costs → Past logistics challenges increased order backlogs and production inefficiencies, raising overall production and overhead costs.
Interest Rate Volatility → Financing Spreads / Earnings → Changing interest rates affect the difference between the yield earned on financial assets and the interest rates paid for funding, impacting earnings in the financial services segment.
Recent Filings
| Form | Filed | Period |
|---|---|---|
| 10-Q | Feb 2026 | Feb 2026 |
| 8-K | Feb 2026 | — |
| 14A | Jan 2026 | — |
| 10-K | Dec 2025 | Nov 2025 |
AI-extracted key facts from press releases and SEC filings. Significance 1–10.
Decisive Dividend raises $8.0M via private placement at $7.51 per share
- ▸Raised $8.0M gross proceeds via non-brokered private placement
- ▸Issued 1,065,000 common shares at $7.51 per share
- ▸L6 Holdings acquired 12% stake in the company
- ▸Net proceeds to reduce credit facility debt and fund future acquisitions
- ▸Investor rights agreement grants L6 right to maintain proportionate ownership
Deere raises FY26 net income guidance to $4.5B–$5B despite sector-wide farm income decline
- ▸FY26 net income guidance raised to $4.5B–$5B
- ▸Small Agriculture & Turf and Construction & Forestry segments sales projected +15%
- ▸Production & Precision Agriculture net sales expected to decline 5–10% YoY
- ▸USDA forecasts 2026 net farm income to dip 0.7% to $153.4B
- ▸Financial Services segment net income projected at $840M, down 5.6% YoY
Deere Q4 Revenue $9.61B +13% YoY, Beats Estimates by 5.9%
- ▸Deere Q4 revenue $9.61B, +13% YoY, beat estimates by 5.9%
- ▸Toro Q4 revenue $1.04B, +4.2% YoY, beat estimates by 3.5%
- ▸Alamo Q4 revenue $373.7M, -3% YoY, missed estimates by 7.8%
- ▸Agricultural machinery sector Q4 revenue beat consensus estimates by 1.3%
- ▸Sector stocks down 12% on average since latest earnings reports
Deere Raises FY26 Net Income Guidance to $4.5B–$5B Despite Sector Headwinds
- ▸FY26 net income guidance raised to $4.5B–$5B
- ▸Q1 2026 revenue +17.5% YoY
- ▸Production & Precision Agriculture sales projected to decline 5–10% YoY
- ▸Financial Services segment net income expected at $840M, down 5.6% YoY
- ▸USDA forecasts 0.7% decline in 2026 net farm income to $153.4B