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Deere & Company revolutionizes the way the world cultivates and builds by delivering cutting-edge machinery that powers agriculture, construction, and forestry. Renowned for its precision agriculture equipment, durable construction machines, and comprehensive financial services, Deere stands as a pillar of innovation and reliability in the industrial sector. As farming and infrastructure needs evolve, the key question remains: does Deere’s current market position and growth trajectory justify its premium valuation for investors seeking stable yet dynamic opportunities?
Table of contents
Business Model & Company Overview
Deere & Company, founded in 1837 and headquartered in Moline, Illinois, stands as a dominant player in the agricultural machinery sector. Its core mission integrates a broad ecosystem of equipment, from mid-size tractors and combines to turf and construction machinery, serving diverse markets like crop producers, livestock farmers, and construction firms. This comprehensive product suite cements Deere’s leadership in enabling productivity across agriculture and forestry industries worldwide.
The company’s revenue engine combines robust sales of hardware—tractors, harvesters, and construction equipment—with its Financial Services segment, which supports sales through financing and leasing solutions. Deere operates globally, with strategic market penetration across the Americas, Europe, and Asia. Its ability to blend durable machinery with value-added financial services creates a strong economic moat, positioning Deere & Company as a key architect of the future in agricultural and industrial innovation.
Financial Performance & Fundamental Metrics
I will analyze Deere & Company’s income statement, key financial ratios, and dividend payout policy to provide a clear view of its financial health and shareholder returns.
Income Statement
The table below summarizes Deere & Company’s key income statement figures for the fiscal years 2021 through 2025, reflecting revenue, expenses, profitability, and earnings per share.
| 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|
| Revenue | 43.0B | 51.3B | 60.2B | 50.5B | 44.7B |
| Cost of Revenue | 29.3B | 35.6B | 37.9B | 31.0B | 28.4B |
| Operating Expenses | 6.1B | 6.7B | 7.7B | 8.1B | 7.9B |
| Gross Profit | 13.7B | 15.7B | 22.3B | 19.5B | 16.3B |
| EBITDA | 10.6B | 12.1B | 17.5B | 14.7B | 11.7B |
| EBIT | 8.6B | 10.2B | 15.5B | 12.6B | 9.4B |
| Interest Expense | 0.99B | 1.06B | 2.45B | 3.35B | 3.17B |
| Net Income | 6.0B | 7.1B | 10.2B | 7.1B | 5.0B |
| EPS | 19.14 | 23.42 | 34.80 | 25.72 | 18.56 |
| Filing Date | 2021-12-16 | 2022-12-15 | 2023-12-15 | 2024-12-12 | 2025-12-18 |
Income Statement Evolution
From 2021 to 2025, Deere & Company’s revenue showed a slight overall increase of 3.79%, but declined by 11.59% in the latest year. Net income experienced a negative trend overall, decreasing by 15.7%, with a sharper fall of nearly 20% in net margin and 27.79% in EPS over the last year. Gross and EBIT margins remained favorable but contracted alongside revenue and profits.
Is the Income Statement Favorable?
In 2025, Deere posted a revenue of $44.7B and net income of $5.03B, with a gross margin of 36.48% and EBIT margin of 21.11%, both rated favorable. However, interest expense at 7.1% and significant declines in profitability, including a net margin fall to 11.25%, reflect challenges. The overall evaluation classifies the income statement as unfavorable due to negative growth trends and margin compressions despite solid margins.
Financial Ratios
The following table summarizes key financial ratios of Deere & Company for selected fiscal years, providing a snapshot of profitability, liquidity, leverage, and efficiency:
| Ratios | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Net Margin | 14% | 14% | 17% | 14% | 11% |
| ROE | 32% | 35% | 47% | 31% | 19% |
| ROIC | 8.1% | 9.2% | 12.6% | 9.5% | 7.1% |
| P/E | 18.7 | 16.9 | 10.6 | 16.0 | 24.9 |
| P/B | 6.1 | 5.9 | 4.9 | 5.0 | 4.8 |
| Current Ratio | 2.22 | 2.02 | 1.96 | 2.13 | 2.31 |
| Quick Ratio | 1.96 | 1.75 | 1.75 | 1.94 | 2.08 |
| D/E | 2.64 | 2.58 | 2.92 | 2.87 | 2.46 |
| Debt-to-Assets | 58% | 58% | 61% | 61% | 60% |
| Interest Coverage | 7.7 | 8.5 | 5.9 | 3.4 | 2.7 |
| Asset Turnover | 0.51 | 0.57 | 0.58 | 0.47 | 0.42 |
| Fixed Asset Turnover | 3.26 | 3.92 | 4.24 | 3.27 | 2.77 |
| Dividend Yield | 0.93% | 1.09% | 1.33% | 1.41% | 1.37% |
Evolution of Financial Ratios
From 2021 to 2025, Deere & Company’s Return on Equity (ROE) declined from 46.7% in 2023 to 19.4% in 2025, indicating a slowdown in profitability. The Current Ratio improved steadily, reaching 2.31 in 2025, reflecting stronger short-term liquidity. However, the Debt-to-Equity Ratio remained elevated, increasing slightly to 2.46 in 2025, signaling persistent leverage.
Are the Financial Ratios Favorable?
In 2025, profitability ratios like net margin (11.25%) and ROE (19.37%) are favorable, while Return on Invested Capital (7.13%) is neutral. Liquidity is strong with a Current Ratio of 2.31 and Quick Ratio of 2.08, both favorable. Leverage remains unfavorable with a Debt-to-Equity of 2.46 and debt-to-assets at 60.3%. Market valuation metrics like P/E (24.9) are neutral, but P/B (4.82) is unfavorable. Overall, ratios present a slightly favorable financial profile.
Shareholder Return Policy
Deere & Company maintains a consistent dividend policy with a payout ratio around 34% in 2025 and a dividend yield near 1.37%. Dividend per share has steadily increased over recent years, supported by coverage from free cash flow and capital expenditure. The company also engages in share buybacks.
This balanced approach combines dividends and repurchases, underpinned by solid profitability and cash flow metrics, suggesting a focus on sustainable long-term shareholder value creation without overstretching financial resources.
Score analysis
The following radar chart displays the company’s evaluation across key financial metrics for a comprehensive overview:
Deere & Company shows a strong return on equity score of 5, indicating very favorable profitability. However, the debt-to-equity and price-to-book scores are low at 1, reflecting unfavorable leverage and valuation metrics. Other scores like discounted cash flow, return on assets, and price-to-earnings are moderate, suggesting balanced performance overall.
Analysis of the company’s bankruptcy risk
Deere & Company’s Altman Z-Score places it in the safe zone, indicating a low risk of bankruptcy and solid financial stability:
Is the company in good financial health?
The Piotroski Score diagram illustrates the company’s financial strength based on nine critical criteria:
With a Piotroski Score of 6, Deere & Company is considered to have average financial health, reflecting moderate strength but not reaching the levels typically associated with strong or very strong companies.
Competitive Landscape & Sector Positioning
This sector analysis will explore Deere & Company’s strategic positioning, revenue by segment, key products, main competitors, and competitive advantages. I will also examine the company’s strengths, weaknesses, opportunities, and threats to determine whether it holds a competitive advantage over its peers.
Strategic Positioning
Deere & Company maintains a diversified product portfolio across agriculture, construction, forestry, and financial services segments, with 2024 revenues led by Production & Precision Agriculture at $20.6B. Geographically, it balances strong domestic sales of $30.2B with significant international exposure across Western Europe, Latin America, and Asia totaling over $16B.
Revenue by Segment
This pie chart illustrates Deere & Company’s revenue distribution across its business segments for the fiscal year 2024, highlighting the relative contribution of each segment.
In 2024, the Production & Precision Agriculture (PPA) segment is the dominant revenue driver with $20.6B, followed by Small Agriculture at $7.7B and Compact Construction Equipment at $8B. Financial Products also contributes significantly with $6.2B. Notable shifts include a solid increase in Production & Precision Agriculture compared to prior years, indicating growth focus, while smaller segments like Forestry and Roadbuilding remain modest contributors. The business shows strong concentration in agriculture-related segments, suggesting exposure to that market’s cyclicality.
Key Products & Brands
The table below highlights Deere & Company’s main products and brand segments with their respective descriptions:
| Product | Description |
|---|---|
| Production and Precision Ag | Mid-size tractors, combines, cotton pickers, sugarcane harvesters, tillage, seeding, sprayers, nutrient management, and soil preparation machinery for grain growers. |
| Small Agriculture and Turf | Utility tractors, loaders, riding lawn and commercial mowing equipment, golf course equipment, utility vehicles, and implements for various turf care applications. Also includes resale products from other manufacturers. |
| Construction and Forestry | Backhoe loaders, crawler dozers and loaders, excavators, motor graders, dump trucks, skid-steer loaders, milling machines, pavers, rollers, crushers, log handling equipment, and roadbuilding machinery. |
| Financial Services | Financing and leasing for agriculture, turf, construction, and forestry equipment; wholesale financing for dealers; extended warranties; and retail revolving charge accounts. |
| Roadbuilding | Equipment for road construction including pavers, compactors, rollers, and related machinery. |
| Compact Construction Equipment | Smaller-scale construction machinery, including compact loaders and excavators. |
| Forestry | Equipment specialized for forestry operations such as log skidders, feller bunchers, loaders, and harvesters. |
| Turf | Equipment for turf maintenance including mowing, aerating, and debris handling machines. |
| Other | Miscellaneous products not categorized in main segments. |
Deere & Company’s diverse product portfolio spans agriculture, turf care, construction, and forestry sectors, supported by financial services that facilitate equipment acquisition and maintenance.
Main Competitors
There are 5 competitors in the Agricultural – Machinery industry, with the table below showing the top 5 leaders by market capitalization:
| Competitor | Market Cap. |
|---|---|
| Caterpillar Inc. | 280B |
| Deere & Company | 126B |
| PACCAR Inc | 59B |
| Hyster-Yale Materials Handling, Inc. | 527M |
| Columbus McKinnon Corporation | 496M |
Deere & Company ranks 2nd among its 5 competitors, with a market cap approximately 50% that of the leader, Caterpillar Inc. It stands above both the average market cap of the top 10 competitors (93B) and the sector median (59B). Deere & Company has a significant 101% market cap gap over its closest rival, highlighting a strong competitive position.
Comparisons with competitors
Check out how we compare the company to its competitors:
Does DE have a competitive advantage?
Deere & Company currently does not present a strong competitive advantage, as its return on invested capital (ROIC) is slightly below its weighted average cost of capital (WACC), indicating value is being shed and profitability is declining. The company’s global moat status is rated slightly unfavorable, reflecting challenges in sustaining excess returns over the 2021-2025 period.
Looking ahead, Deere & Company operates across diverse segments including Production and Precision Agriculture, Small Agriculture and Turf, Construction and Forestry, and Financial Services, which may offer opportunities for expansion into new markets and product lines. However, recent financial trends show unfavorable revenue and margin growth, suggesting cautious observation of future developments is warranted.
SWOT Analysis
This SWOT analysis highlights Deere & Company’s key internal and external factors to inform strategic investment decisions.
Strengths
- Strong market position in agricultural machinery
- Diverse product segments across agriculture, construction, and financial services
- Favorable net margin and ROE indicating operational efficiency
Weaknesses
- Recent revenue and profit declines
- High debt-to-equity ratio impacting financial stability
- Declining ROIC signaling value erosion
Opportunities
- Expansion in emerging markets such as Asia and Latin America
- Growth potential in precision agriculture technologies
- Increasing demand for sustainable and automated farming solutions
Threats
- Global economic slowdown affecting capital investments
- Intense competition in machinery and equipment sectors
- Supply chain disruptions increasing costs and delivery times
Deere & Company benefits from a solid industry presence and diversified operations but faces challenges from recent financial declines and leverage concerns. Strategic focus on innovation and emerging markets could offset risks posed by economic and competitive pressures.
Stock Price Action Analysis
The weekly stock chart for Deere & Company (DE) over the past 12 months illustrates notable price movements and trend developments:
Trend Analysis
Over the past 12 months, Deere & Company’s stock price increased by 39.85%, indicating a bullish trend with acceleration. The price ranged from a low of 346.03 to a high of 531.48, showing substantial upward momentum. The overall volatility is high, with a standard deviation of 49.41.
Volume Analysis
In the last three months, trading volumes have been decreasing overall. However, buyer-driven activity dominated recently, with buyers accounting for 65.76% of volume between November 2025 and January 2026. This suggests a strengthening investor interest despite lower total market participation.
Target Prices
The consensus target prices for Deere & Company reflect moderate upside potential based on analyst forecasts.
| Target High | Target Low | Consensus |
|---|---|---|
| 612 | 458 | 529.5 |
Analysts expect Deere & Company’s stock to trade between $458 and $612, with a consensus target near $530, suggesting cautious optimism in the medium term.
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Analyst & Consumer Opinions
This section examines the latest analyst ratings and consumer feedback regarding Deere & Company’s market position and performance.
Stock Grades
Here is a summary of the latest verified stock grades for Deere & Company from recognized analysts:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Jefferies | Maintain | Hold | 2025-12-09 |
| DA Davidson | Maintain | Buy | 2025-12-01 |
| Truist Securities | Maintain | Buy | 2025-11-28 |
| RBC Capital | Maintain | Outperform | 2025-11-28 |
| Oppenheimer | Maintain | Outperform | 2025-11-28 |
| Evercore ISI Group | Maintain | In Line | 2025-11-28 |
| UBS | Upgrade | Buy | 2025-10-17 |
| JP Morgan | Maintain | Neutral | 2025-10-14 |
| Truist Securities | Maintain | Buy | 2025-10-08 |
| Oppenheimer | Maintain | Outperform | 2025-09-18 |
The overall trend shows a predominance of buy and outperform ratings with several analysts maintaining their positive outlook, alongside a substantial number of hold ratings, reflecting a balanced investor sentiment for Deere & Company.
Consumer Opinions
Deere & Company continues to evoke strong opinions from its user base, reflecting its significant role in agricultural and construction equipment markets.
| Positive Reviews | Negative Reviews |
|---|---|
| Durable machinery that withstands tough working conditions. | High initial purchase price can be a barrier for small farms. |
| Excellent customer service with responsive support teams. | Some customers report delays in spare parts availability. |
| Innovative technology features improve operational efficiency. | Maintenance costs are perceived as higher compared to competitors. |
Overall, consumer feedback praises Deere & Company for its durable equipment and strong customer service, while concerns mainly focus on affordability and parts availability challenges.
Risk Analysis
Below is a summary table of key risks related to Deere & Company, highlighting their likelihood and potential impact on investors:
| Category | Description | Probability | Impact |
|---|---|---|---|
| Financial Leverage | High debt-to-equity ratio (2.46) may limit financial flexibility and increase interest burden. | High | High |
| Market Volatility | Stock price range shows fluctuation between 404.42 and 533.78 USD, indicating moderate volatility. | Medium | Medium |
| Profitability | Net margin and ROE are favorable but asset turnover and price-to-book ratio are unfavorable. | Medium | Medium |
| Economic Cycles | Exposure to agriculture and construction sectors makes earnings sensitive to economic downturns. | Medium | High |
| Dividend Yield | Modest yield (1.37%) may limit income appeal during market stress. | Low | Low |
The most significant risks stem from Deere’s relatively high leverage and sector cyclicality, which could amplify negative impacts during economic slowdowns. Despite a strong Altman Z-score placing the company in the safe zone, debt levels and asset utilization metrics warrant cautious monitoring.
Should You Buy Deere & Company?
Deere & Company appears to be a moderately profitable enterprise with a slightly unfavorable moat, suggesting operational challenges amid declining value creation. Despite a manageable leverage profile, its overall B- rating reflects a cautious investment profile with moderate financial strength.
Strength & Efficiency Pillars
Deere & Company exhibits solid profitability, marked by a net margin of 11.25% and a return on equity (ROE) of 19.37%, reflecting effective profit generation from shareholders’ equity. The Altman Z-Score of 3.02 places the company safely in the non-distress zone, underscoring stable financial health. Current and quick ratios above 2.0 further highlight robust liquidity. Although the return on invested capital (ROIC) at 7.13% matches the weighted average cost of capital (WACC) also at 7.13%, indicating that Deere is currently neither creating nor destroying value, its consistent profitability metrics and moderate Piotroski score of 6 suggest operational resilience.
Weaknesses and Drawbacks
Deere faces notable challenges, primarily in leverage and valuation. The debt-to-equity ratio stands high at 2.46, coupled with a debt-to-assets ratio of 60.32%, signaling substantial financial leverage that could heighten risk in adverse conditions. The price-to-book ratio of 4.82 is unfavorable, suggesting the stock trades at a premium relative to its book value, potentially limiting upside. Additionally, asset turnover is low at 0.42, indicating less efficient use of assets in generating sales. These factors, alongside a mixed recent income statement with significant declines in revenue and earnings growth, present cautionary signals for investors.
Our Verdict about Deere & Company
Deere & Company’s long-term fundamental profile appears moderately favorable given its profitability and financial stability, despite certain areas of concern such as leverage and valuation. The stock’s overall bullish trend and recent buyer dominance, with 65.76% buyer volume since November 2025, may suggest emerging positive momentum. This combination might appear attractive for investors considering long-term exposure, though the elevated debt levels and premium valuation could warrant a cautious stance and careful risk management.
Disclaimer: This content is for informational purposes only and does not constitute financial, investment, or other professional advice. Investing in financial markets involves a significant risk of loss, and past performance is not indicative of future results.
Additional Resources
- Deere’s finance chief Joshua Jepsen to join Honeywell’s aerospace unit – Reuters (Jan 22, 2026)
- John Deere Rolls Out See & Spray Gen 2 and Upgrades Sprayer Lineup – Successful Farming (Jan 22, 2026)
- Faster Tillage, Smarter Spraying: John Deere Expands Its Machinery Lineup – AgWeb (Jan 22, 2026)
- Inside Lacrosse – Inside Lacrosse (Jan 21, 2026)
- 2021 John Deere 6120R – Lancaster Farming (Jan 23, 2026)
For more information about Deere & Company, please visit the official website: deere.com
