DE
Deere & Company$630.88
Sell
Target $483.60
Report: Mar 08, 2026Industrials • Agricultural - Machinery • Cyclical OperatorSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$630.88-23.3%
Rec: SellConviction: High
Entry Target
N/A
N/A
Fair Value
$483.60
(23% below current)
Stop Loss
N/A
N/A
Position Size
None
Time Horizon
N/A
Key Metrics
Live Snapshot
Market Data
52 Week High$674.19
52 Week Low$404.42
Avg. 3 Month Volume1.60M
Efficiency
LTM Gross Margin37.2%
LTM EBITDA Margin24.7%
LTM EBIT Margin19.9%
LTM Operating Margin19.8%
LTM ROA4.5%
LTM ROE18.9%
LTM ROIC5.9%
LTM ROCE8.8%
Capital Structure
Market Cap (MM)$152.2B
Enterprise Value (MM)$207.8B
Shares Outstanding270.30M
Total Debt (MM)$62.48B
Cash & Equivalents (MM)$6.80B
LTM Net Debt (MM)$55.68B
LTM Net Debt/EBITDA4.8x
Growth
TTM Rev. Growth-2.6%
Last 3-Yr Rev. CAGR-5.6%
Last 3-Yr EBITDA CAGR-5.5%
Last 3-Yr EPS CAGR-13.1%
Valuation
Street Target Price$685.17
LTM EV/Revenue4.4x
LTM EV/Gross Profit12.0x
LTM EV/EBIT22.3x
LTM EV/EBITDA18.0x
LTM P/E31.6x
LTM EV/FCF38.2x
LTM P/FCF28.0x
LTM P/TB1.5x
LTM P/B5.8x
Dividend Yield1.2%
Payout Ratio36.4%
Executive SummarySituation: Current price is $630.88 versus fair value $483.6 (-23.3% expected return), and valuation confidence is stable. Debate: Bull case depends on Failure to meet fiscal 2026 net income guidance of $4.5-$5.0 billion. Bear case centers on Lower-for-longer cyclical downturn in agriculture. Conclusion: Recommendation is Sell with no position, pending a materially better risk/reward setup.
Bull Case
Rapid adoption of high-margin precision technologies like See & Spray, which now covers over 5 million acres, could drive a structural shift toward SaaS revenue. Management's successful reduction of used inventory, with late-model tractors down 20% sequentially, sets the stage for a powerful replacement cycle in 2026.
Bear Case
Structural margin compression from $1.2 billion in annual tariff costs and higher labor expenses will prevent a return to peak 25% operating margins. High leverage, with a 246.4% debt-to-equity ratio, limits the company's ability to fund counter-cyclical buybacks if the downturn is prolonged.
Key Catalysts
Mid-Term (6-18 months)Impact: High
Failure to meet fiscal 2026 net income guidance of $4.5-$5.0 billion. This would validate our perception that the market is overestimating t...
Mid-Term (6-18 months)Impact: High
The primary value driver is the erosion of earnings quality as operating margins fell 370 basis points to 20.6% in fiscal 2025. This decay w...
Long-Term (18+ months)Impact: Moderate
Deere is relevant at this moment because the stock has rallied 15% following a Q1 2026 earnings report that actually showed a 25% decline in...
Primary Risks
Concern: High
Lower-for-longer cyclical downturn in agriculture. A prolonged period of low farm profitability would prevent the expected 2026 recovery, le...
Concern: Medium
In a severe operational decline scenario where a global recession prolongs the agricultural downturn and tariffs escalate beyond $1.2 billio...
Concern: Medium
The stewardship verdict is cautious due to the Governance Outcome Tree: 1. Status Quo: The acting CFO remains in place, and the company stru...
Recent Activity
2026-02-19SEC Filing (8-K)
+11.58%Deere & Company reported Q1 2026 net income of $656 million, down 25% from prior year.
2025-11-26SEC Filing (8-K)
-5.67%Deere & Company reports Q4 2025 net income of $1.065 billion, down 14% year-over-year
2025-08-14SEC Filing (8-K)
-6.76%Deere & Company reports Q3 2025 net income of $1.289 billion, down 26% from prior year, with year-to-date net income of $3.962 billion.
2025-01-11SEC Filing (DEFA14A)
+5.22%Deere & Company held its 2025 Annual Meeting, electing 11 directors and voting on shareholder proposals.
2024-11-21SEC Filing (8-K)
+8.05%Deere & Company reports Q4 2024 net income of $1.245 billion, down 47% from prior year, with full-year 2024 net income of $7.1 billion.
Valuation Table
9.8/10Decision Grade
Scenario Range
$362
Bear
$749
Bull
$631