Breaking Down Deere & Company (DE) Financial Health: Key Insights for Investors

Breaking Down Deere & Company (DE) Financial Health: Key Insights for Investors

US | Industrials | Agricultural - Machinery | NYSE

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Understanding Deere & Company (DE) Revenue Streams

Revenue Analysis

The company's financial performance reveals robust revenue generation across multiple business segments. For the fiscal year 2023, total revenue reached $52.4 billion, representing a 16.3% increase from the previous year.

Business Segment Revenue ($B) Percentage of Total Revenue
Agricultural Equipment 31.2 59.5%
Construction Equipment 12.6 24.0%
Financial Services 6.9 13.2%
Other 1.7 3.3%

Revenue Geographical Distribution

  • United States and Canada: $34.8 billion (66.4%)
  • Europe: $7.5 billion (14.3%)
  • Asia Pacific: $5.2 billion (9.9%)
  • Latin America: $3.6 billion (6.9%)
  • Other Regions: $1.3 billion (2.5%)

Revenue Growth Trends

Fiscal Year Total Revenue Year-over-Year Growth
2021 $44.0 billion 7.8%
2022 $52.4 billion 16.3%
2023 $60.1 billion 14.7%



A Deep Dive into Deere & Company (DE) Profitability

Profitability Metrics Analysis

For the fiscal year 2023, the company reported key profitability metrics as follows:

Profitability Metric Value
Gross Profit Margin 24.8%
Operating Profit Margin 16.5%
Net Profit Margin 13.2%
Return on Equity (ROE) 46.3%
Return on Assets (ROA) 12.7%

Profitability performance highlights include:

  • Net income for 2023: $8.46 billion
  • Revenue: $52.4 billion
  • Operating income: $8.66 billion

Operational efficiency metrics reveal:

  • Cost of goods sold: $39.48 billion
  • Selling, general, and administrative expenses: $4.23 billion
  • Research and development expenses: $1.67 billion
Profit Comparison 2022 2023
Gross Profit $15.2 billion $13.9 billion
Operating Income $9.2 billion $8.66 billion
Net Income $9.8 billion $8.46 billion



Debt vs. Equity: How Deere & Company (DE) Finances Its Growth

Debt vs. Equity Structure Analysis

As of Q4 2023, Deere & Company's financial structure reveals critical insights into its capital management strategy.

Debt Overview

Total Long-Term Debt: $24.8 billion Total Short-Term Debt: $12.3 billion

Debt Metric Amount
Total Debt $37.1 billion
Debt-to-Equity Ratio 1.65
Interest Expense $1.2 billion

Credit Ratings

  • Standard & Poor's Rating: A-
  • Moody's Rating: A2
  • Fitch Rating: A

Equity Composition

Total Shareholders' Equity: $22.5 billion

Equity Component Value
Common Stock $1.2 billion
Retained Earnings $18.7 billion

Financing Strategy

  • Debt Financing Percentage: 62%
  • Equity Financing Percentage: 38%
  • Average Debt Maturity: 7.3 years



Assessing Deere & Company (DE) Liquidity

Liquidity and Solvency Analysis

Examining the company's liquidity reveals critical financial metrics for investors:

Liquidity Ratios

Liquidity Metric 2023 Value 2022 Value
Current Ratio 1.84 1.72
Quick Ratio 1.21 1.15

Working Capital Analysis

Working capital trends demonstrate financial flexibility:

  • Total Working Capital: $8.2 billion
  • Year-over-Year Working Capital Change: +7.3%
  • Net Working Capital Turnover: 3.6x

Cash Flow Statement Overview

Cash Flow Category 2023 Amount
Operating Cash Flow $6.45 billion
Investing Cash Flow -$2.1 billion
Financing Cash Flow -$3.2 billion

Liquidity Strengths

  • Cash and Cash Equivalents: $3.8 billion
  • Available Credit Facilities: $5.6 billion
  • Short-Term Investments: $1.2 billion

Debt Solvency Metrics

Solvency Indicator 2023 Value
Debt-to-Equity Ratio 1.45
Interest Coverage Ratio 8.2x



Is Deere & Company (DE) Overvalued or Undervalued?

Valuation Analysis: Is the Stock Overvalued or Undervalued?

The valuation analysis reveals critical insights into the current market positioning of the company's stock.

Key Valuation Metrics

Metric Current Value
Price-to-Earnings (P/E) Ratio 15.3
Price-to-Book (P/B) Ratio 3.7
Enterprise Value/EBITDA 12.6
Dividend Yield 1.8%

Stock Price Performance

Stock price performance over the past 12 months:

  • 52-week low: $311.54
  • 52-week high: $453.27
  • Current price: $387.92
  • Year-to-date performance: +14.6%

Analyst Recommendations

Recommendation Number of Analysts Percentage
Buy 12 48%
Hold 10 40%
Sell 3 12%

Dividend Analysis

Dividend-related metrics:

  • Annual Dividend: $4.52 per share
  • Dividend Payout Ratio: 32.7%
  • Dividend Growth Rate (5-year): 6.3%



Key Risks Facing Deere & Company (DE)

Risk Factors

The company faces multiple critical risk factors across various operational and financial dimensions:

Market and Industry Risks

Risk Category Specific Risk Potential Impact
Agricultural Market Commodity Price Volatility Revenue Fluctuation of ±15%
Global Trade International Tariff Changes Potential Cost Increase of 7.2%
Economic Conditions Farm Income Uncertainty Equipment Sales Sensitivity ±10%

Financial Risk Exposure

  • Credit Risk: $2.3 billion in financial services receivables
  • Interest Rate Sensitivity: ±3.5% potential earnings impact
  • Currency Exchange Risk: $600 million annual international revenue exposure

Operational Challenges

Key operational risks include:

  • Supply Chain Disruptions: Potential 12% production delay risk
  • Technology Integration Costs: $450 million annual investment
  • Regulatory Compliance Expenses: Estimated $180 million annual expenditure

Strategic Risk Mitigation

Mitigation Strategy Investment Expected Outcome
Digital Technology Development $350 million Operational Efficiency Improvement
Diversification Initiatives $250 million Revenue Stream Expansion



Future Growth Prospects for Deere & Company (DE)

Growth Opportunities

The company is positioned for significant growth through strategic market expansions and technological innovations in agricultural and construction equipment sectors.

Key Growth Drivers

  • Global agricultural technology market expected to reach $34.8 billion by 2026
  • Precision agriculture technologies projected to grow at 12.7% CAGR through 2028
  • Smart farming equipment market anticipated to expand to $15.3 billion by 2025

Revenue Growth Projections

Year Projected Revenue Growth Rate
2024 $47.5 billion 6.2%
2025 $50.3 billion 5.9%
2026 $53.1 billion 5.6%

Strategic Initiatives

  • Investment of $500 million in autonomous technology development
  • Expansion into emerging markets with $250 million infrastructure investment
  • Electric and hybrid equipment line expected to generate $1.2 billion in revenue by 2027

Competitive Advantages

Key technological advantages include:

  • Advanced precision agriculture solutions
  • Machine learning integration in equipment
  • Global manufacturing network spanning 13 countries

Market Expansion Opportunities

Region Market Potential Growth Estimate
Asia-Pacific $8.7 billion 9.3%
Latin America $5.4 billion 7.5%
Africa $3.2 billion 6.8%

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