Is Deere & Company (DE) Destined for Greatness?

Many heavy equipment companies are struggling to produce revenue growth, but Deere expects to grow its equipment sales by 6%, mainly due to an upsurge in sales across South America (particularly in Brazil, which produced net income of roughly $3.3 billion in the 2013 fiscal year). On the other hand, Deere & Company (NYSE:DE)’s construction and forestry sales are projected to fall by 5% during the year, but this shouldn’t have a strong adverse effect on Deere’s sales growth. In 2012, most of its revenue — $27.1 billion — was from agriculture and turf equipment, while the construction and forestry segment pulled in $6.4 billion.

Looking forward, Deere & Company (NYSE:DE)’s sales are likely to rise further as the company continues to increase its exposure to high-growth countries like Brazil. Moreover, if the company continues to expand its agriculture and turf business, this could also lead to an increase in profit margins in the coming years. On the other hand, the recent sociopolitical instability in Brazil reminds us to never get too complacent when investing in overseas opportunities. Additionally, a strengthening U.S. dollar could crimp international sales growth.

Putting the pieces together
Today, Deere & Company (NYSE:DE) has many of the qualities that make up a great stock, but no stock is truly perfect. Digging deeper can help you uncover the answers you need to make a great buy — or to stay away from a stock that’s going nowhere.

Fool contributor Alex Planes has no position in any stocks mentioned. The Motley Fool owns shares of Terex.

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