We came across a bullish thesis on Deere & Company on ShowMeTheValue’s Substack. In this article, we will summarize the bulls’ thesis on DE. Deere & Company’s share was trading at $644.54 as of February 24th. DE’s trailing and forward P/E were 24.12 and 22.57 respectively according to Yahoo Finance.
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Deere & Company engages in the manufacture and distribution of various equipment worldwide. DE enters FY2025 at what appears to be a cyclical trough, positioning the company for a potential recovery as agricultural conditions stabilize. Headquartered in Moline, Illinois, Deere operates through two primary divisions: Equipment Operations and Financial Services, with the former spanning Production & Precision Agriculture (PPA), Small Agriculture & Turf (SAT), and Construction & Forestry (CF). While Financial Services supports equipment demand through customer financing, the core earnings power resides within Equipment Operations.
Like most industrial manufacturers exposed to farming, Deere’s results are highly cyclical, closely tracking farm income and crop prices. Following commodity price peaks in 2022, soybean, corn, and wheat prices have normalized toward 2019 levels, pressuring farm income and leading to reduced equipment purchases. This dynamic drove declining net sales from FY2023 through FY2025, though recent quarterly data suggests the rate of contraction is slowing, indicating that the bottom of the cycle may be forming.
Despite the downturn, Deere remains significantly larger than key agricultural competitors such as CNH Industrial and Kubota in Equipment Operations, with approximately double their scale. In agriculture specifically, Deere experienced a 14% sales decline in FY2025, broadly in line with peers, though Europe-focused CLAAS demonstrated greater resilience. In Construction & Forestry, Deere trails industry leaders like Caterpillar and Komatsu in absolute size, yet its competitive positioning remains solid across end markets.
Importantly, Deere’s stock has risen approximately 75% since the end of 2020, outperforming most agricultural peers and signaling market confidence in its structural advantages. With sales declines moderating, strong competitive scale, and demonstrated cycle resilience, Deere appears well positioned for earnings recovery as farm economics stabilize, making the current environment an attractive long-term entry point.
Previously, we covered a bullish thesis on Deere & Company (DE) by Best Anchor Stocks in May 2025, which highlighted the company’s margin resilience, consistent earnings beats, aggressive buybacks, and expanding ag-tech initiatives despite cyclical pressures. DE’s stock price has appreciated by approximately 26.88% since our coverage. ShowMeTheValue shares a similar view but emphasizes on cyclical trough dynamics and recovery potential.
Deere & Company is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 67 hedge fund portfolios held DE at the end of the third quarter which was 59 in the previous quarter. While we acknowledge the risk and potential of DE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than DE and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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Disclosure: None.
