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Moline, Illinois-based Deere & Company (DE) manufactures and distributes various equipment worldwide. It focuses on revolutionizing agriculture with technology to make farming automated, easier, and more precise across the production process. With a market cap of $110.7 billion, Deere operates as the world's largest producer of agricultural equipment.
The equipment manufacturer has lagged behind the broader market over the past year. DE stock has gained 1.2% on a YTD basis and 5.3% over the past 52 weeks, underperforming the S&P 500 Index’s ($SPX) surge of 23.6% in 2024 and 30.6% over the past year.
Zooming in further, Deere has also underperformed the Industrial Select Sector SPDR Fund’s (XLI) gains of 21.9% in 2024 and 31.5% over the past year.
Deere’s dependence on the agricultural industry has made it vulnerable to the downturn in business cycles, and supply chain disruptions have led to increased costs and production delays, contributing to its stock's underperformance in recent years. However, DE stock soared 6.3% after the release of better-than-expected Q3 earnings on Aug. 15. Despite the challenging conditions, Deere demonstrated resilience in adapting to market fluctuations and remained focused on providing value to its customers.
Although due to weak demand the company reported a 16.8% year-over-year decline in net sales to $13.2 billion, it surpassed Wall Street’s topline expectations. Moreover, Deere’s adjusted EPS of $6.29 also surpassed analysts’ consensus estimates by a notable 8.5% which boosted investor confidence and led to the surge in stock prices.
Analysts expect Deere to report a 27.8% year-over-year decline in adjusted EPS to $25, for the fiscal 2024 ended in October. However, the company has a robust earnings surprise history. Deere has surpassed analysts' bottom-line estimates in the past four quarters.
DE stock has a consensus “Moderate Buy” rating overall. Among the 20 analysts covering the stock, 10 recommend “Strong Buy,” two advise “Moderate Buy,” and eight suggest a “Hold” rating.
This configuration has been consistent over the past months.
On Oct. 9, Citigroup Inc. (C) analyst Kyle Menges maintained a “Hold” rating on DE while raising the price target to $420.
DE’s mean price target of $425.11 represents a premium of just 5.1% to current price levels. Meanwhile, the Street-high price target of $496 suggests a potential upside of 22.6%.
