DEERE & CO (DE) Stock Analysis
DEERE & CO (DE) Stock Analysis
Analysis from 10-K filed 2025-12-18. Data as of Q1 2026.
Overall Grade: F (Concerning)
DEERE & CO faces challenges in financial performance that warrant careful analysis.
| Metric | Value | Context |
|---|---|---|
| ROIC | 5.6% | Below expectations |
| FCF Margin | 13.8% | Healthy cash flow |
| Debt/Equity | 2.1x | Elevated debt |
Investment Thesis: Healthy free cash flow margin of 13.8% provides financial flexibility for growth and shareholder returns.
Explore DEERE & CO: Earnings History | Filing Intelligence | ROIC Analysis
Profitability: DEERE & CO earns 5.6% ROIC, Bottom 50% in Industrials
DEERE & CO's trailing-twelve-month ROIC of 5.6% ranks Bottom 50% in Industrials companies (sector median: 7.4%), driven by NOPAT margin of 9.9% combined with asset turnover of 0.4x. Source: 10-K filed 2025-12-18.
| Metric | DE | Rating | Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 5.6% | Warning | Below sector median of 7.4% |
| Return on Equity (ROE) | 19.3% | Good | Efficient use of shareholder equity |
| Operating Margin | 12.8% | Good | Moderate operational efficiency |
Cash Flow: DEERE & CO generates $6.4B FCF at 13.8% margin, positive NaN/8 quarters
DEERE & CO generated $6.4B in free cash flow (TTM), a 13.8% FCF margin, a margin that ranks Top 25% in Industrials. Operating cash flow exceeds net income by 1.6x, indicating high earnings quality. FCF was positive in N/A of the last 8 quarters. Source: 10-K filed 2025-12-18.
| Metric | DE | Rating | Context |
|---|---|---|---|
| Free Cash Flow Margin | 13.8% | Good | Healthy cash generation |
| Free Cash Flow (TTM) | $6.4B | Good | Positive cash generation |
| OCF/Net Income | 1.6x | Excellent | High earnings quality |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
Balance Sheet: DEERE & CO at 2.1x leverage
DEERE & CO's debt-to-equity ratio of 2.1x reflects high leverage. Total debt of $56.1B offset by $7.1B in cash. Source: 10-K filed 2025-12-18.
| Metric | DE | Rating | Context |
|---|---|---|---|
| Debt to Equity | 2.1x | Warning | Elevated leverage |
| Net Cash Position | $-49.0B | Warning | Net debt position |
Valuation: DEERE & CO trades at 29.7x earnings
DEERE & CO trades at a P/E of 29.7x. Free cash flow yield of 4.5% reflects market expectations for growth.
| Metric | DE | Rating | Context |
|---|---|---|---|
| P/E Ratio | 29.7x | Adequate | Premium valuation |
| EV/Sales | 4.1x | Good | Growth premium priced in |
| FCF Yield | 4.5% | Good | Lower cash yield |
| Dividend Yield | 1.2% | Adequate | Growth focus over income |
Capital Allocation: DEERE & CO returns 1.9% shareholder yield
DEERE & CO's total shareholder yield is 1.9% (dividends 1.2% + buybacks 0.7%). Source: 10-K filed 2025-12-18.
| Metric | DE | Rating | Context |
|---|---|---|---|
| Total Shareholder Yield | 1.9% | Adequate | Dividend + buyback yield combined |
| Buyback Yield | 0.7% | Adequate | Minimal buyback activity |
| Total Capital Returned (TTM) | $2.8B | Good | Dividends + buybacks returned to shareholders |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 5.6% | Bottom 50% | 0.8x below |
| Free Cash Flow Margin | 13.8% | Top 25% | 3.0x above |
| Operating Margin | 12.8% | Top 50% | 1.7x above |
| Return on Equity (ROE) | 19.3% | Top 25% | 2.2x above |
| P/E Ratio | 29.7x | N/A | - |
Financial Scorecard
| Metric | DE | Rating | Sector Context |
|---|---|---|---|
| Return on Invested Capital (ROIC) | 5.6% | Warning | Bottom 50% of sector (median: 7.4%) |
| Free Cash Flow Margin | 13.8% | Good | Top 25% of sector (median: 4.6%) |
| Debt to Equity Ratio | 213.4% | Warning | High financial leverage |
| P/E Ratio (Price-to-Earnings) | 29.7x | Adequate | Growth premium |
| Free Cash Flow Yield | 4.5% | Adequate | Moderate yield |
Frequently Asked Questions
Q: What is DEERE & CO's Return on Invested Capital (ROIC)?
DEERE & CO (DE) has a trailing twelve-month Return on Invested Capital (ROIC) of 5.6%. This compares below the sector median of 7.4%. An ROIC below 8% suggests the company may be destroying shareholder value.
Q: What is DEERE & CO's Free Cash Flow Margin?
DEERE & CO (DE) has a free cash flow margin of 13.8%, generating $6.4 billion in free cash flow over the trailing twelve months. A FCF margin between 10-20% represents healthy cash generation for most industries.
Q: Is DEERE & CO stock overvalued or undervalued?
DEERE & CO (DE) trades at a P/E ratio of 29.7x, which is above the sector median of N/A. The EV/Sales multiple is 4.1x. Free cash flow yield is 4.5%, which is in line with market averages.
Q: Does DEERE & CO pay a dividend?
DEERE & CO (DE) currently pays a dividend yield of 1.2%. Including share buybacks, the total shareholder yield is 1.9%. The relatively low yield suggests the company prioritizes growth reinvestment over income distribution.
Q: How much debt does DEERE & CO have?
DEERE & CO (DE) has a debt-to-equity ratio of 2.1x with total debt of $56.1 billion. Net debt position is $49.0 billion.
Q: What is DEERE & CO's revenue and earnings growth?
DEERE & CO (DE) declined revenue by 2.6% year-over-year. Earnings per share decreased by 21.5% compared to the prior year. Revenue decline may indicate market challenges or industry headwinds.
Q: Is DEERE & CO buying back stock?
DEERE & CO (DE) repurchased $999.0 million of stock over the trailing twelve months. This represents a buyback yield of 0.7%.
Q: How does DEERE & CO compare to competitors in Industrials?
Compared to other companies in Industrials, DEERE & CO (DE) shows: ROIC of 5.6% is below the sector median of 7.4% (Bottom 42%). FCF margin of 13.8% exceeds the sector median of 4.6% (Top 17% of sector). These rankings are based on MetricDuck's analysis of all Industrials companies with available SEC filings.
Q: What warning signs should I watch for with DEERE & CO?
Investors in DEERE & CO (DE) should monitor these potential warning signs: 1) ROIC has been declining, potentially signaling deteriorating competitive position. 2) Debt-to-equity of 2.1x is elevated. Regular monitoring of SEC filings and quarterly trends is recommended.
Data Source: Data sourced from 10-K filed 2025-12-18. TTM metrics as of Q1 2026.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.
This analysis is for informational purposes only and does not constitute investment advice.