Deere: Massive Price Decline. Is the Turnaround Coming?

Last Updated: 5. Dezember 2023By

The stock market is trading the future – what good are the best numbers from the past in that case? That’s what Deere had to experience now. Deere & Co is one of the leading manufacturers of agricultural equipment worldwide. With a wide range of products, Deere covers all the necessary equipment for agricultural activities, ranging from arable farming to gardening and forestry.

Deere increases turnover and profit For the full year, the company reported a turnover of 55.56 billion US dollars compared to 47.91 billion US dollars a year ago. Revenues amounted to 61.25 billion US dollars compared to 52.57 billion US dollar in the previous year. The net profit amounted to 10.16 billion US dollars compared to 7.13 billion US dollars in the previous year. The earnings per share of 34.8 US dollars has significantly improved compared to the previous year’s result of 23.42 US dollars.

Forecast remains clearly behind expectations For 2024, the world’s largest manufacturer of agricultural machinery expects a net profit of between 7.75 billion US dollars and 8.25 billion US dollars, compared to the average analyst expectations of 9.33 billion US dollars. Thus, Deere has clearly missed the expectations of analysts.

Massive share price loss Despite improved figures compared to the previous year, Deere’s share price has not performed well. An downward trend has dominated since August, which has now been intensified. What do analysts expect for the future of the company? Should you be investing following the motto „buy on bad news“?

Analysts remain positive despite weak forecast Conclusion: If you look at analyst expectations instead of the chart, the sentiment becomes somewhat better. 15 out of 26 analysts recommend a buy and 11 advise to hold. At this low level, no analyst wants to sell anymore. The average analyst target price is 427 US dollars and the highest is 490 US dollars. A P/E ratio of 12 is moderate, although there is hardly any growth potential for the next few years according to the profit forecasts until 2026.