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That was a fast 9% profit on DE so far.
DE senior executive sells $2.5M of stock under newly established 10b5-1 plan:
https://www.sec.gov/Archives/edgar/data/315189/000031518923000014/xslF345X04/primary_doc.xml
From today's CC—DE's C&F* segment is benefiting from contractors who are ordering more capital equipment to compensate for the labor shortage.
*Construction and Forestry.
Don't know about forever, but several of my investments are with firms over 100 years old. Deere may be the oldest among my holdings, dating back to 1837.
https://en.wikipedia.org/wiki/John_Deere_(inventor)
DE is a buy-and-hold-forever kind of stock, IMO. I don’t sweat the small stuff.
That was quite a swing. I almost always buy shares in about 4 stages with each spaced about 6 weeks apart to deal with the FACT that most trades are made at the very worst times. (there are plenty of academic studies that show that). Humans are terribly wired -- probably from birth -- for investing. So the goal is to buy and sell coldly, with little emotion. I have several DE buys to make yet.
Recession?
Today we have yet another data point from DE (#msg-171947205) to supplement the recent data point from CAT (#msg-171784334) to argue against a near-term economic downturn.
True, both DE and CAT have special tailwinds, but we can’t simply dismiss the stellar performance of these two bellwethers from the outlook for the global economy.
How can the FY2023 P/E ratio be only 12? Because many investors still (wrongly, IMO) consider DE a textbook cyclical company and hence they think the current business conditions will get worse when the cycle turns down.
DE reports FY2Q23* results—raises fiscal-year guidance again:
https://s22.q4cdn.com/253594569/files/doc_financials/2023/q2/DE-2Q23-News-Release-and-Financials.pdf
FQ2Q23 was another superb quarter with volume and pricing gains in all three operating segments. Price increases more than offset increased production costs, and DE expects this to be true during all of FY2023.
• FY2Q23 product sales (excluding revenue from DE’s finance unit) were $16.1B, +34% YoY.
• FY2Q23 GAAP EPS was $9.65, +42% YoY.
DE again raised FY2023 net-income guidance to a range of $9.25-9.50B (up from $8.75-9.25B three months ago and $8.0-8.5B six months ago).
Based on 297M diluted shares @4/30/23, DE’s FY2023 net-income guidance equates to FY2023 GAAP EPS of $31.10-32.00, +34-37%(!) relative to $23.28 in FY2022, and +64-69%(!!) relative to $18.99 in FY2021.
At the current share price ($385.50 as I’m typing), the FY2023 EPS guidance equates to a FY2023 P/E ratio of 12.
*DE’s fiscal years end on Oct 31; FY2Q23 spanned the period from 2/1/23 to 4/30/23.
What happened? $386, then it drops to $372?
"Deere tops Q2 profit views on strong sales, raises annual income outlook"
"(Reuters) -Deere & Co on Friday topped Wall Street profit expectations on strong sales of its tractors and precision agriculture equipment, and raised its net income forecast for the rest of the year as its order books remain robust.
Shares in the world's largest farm equipment maker were up 3.6% in premarket trading after the company reported a 36% rise in second-quarter profit."
"The Moline, Illinois-based company has sustained margin improvements by mitigating cost pressures across its equipment divisions as well as constraints in supply chains that are only now moderating for most industrial companies."
Deere posted earnings per share of $9.65, outpacing analysts' estimates of $8.59.
https://finance.yahoo.com/news/deere-raises-fy-profit-outlook-101348804.html
DD, I buy the highest quality growth stocks and almost never sell them. I can't figure out why Berkshire no longer owns Deere shares even with Warren's son, Howard Buffett, an enthusiastic long time Deere farmer. Berkshire Hathaway owned millions of DE shares around 2014.
Howard Buffett on Deere Tractor
Deere Q Dividend Growth
Date Dividends
Mar 30, 2023 1.25 Dividend
Dec 29, 2022 1.20 Dividend
Sep 29, 2022 1.13 Dividend
Jun 29, 2022 1.13 Dividend
Mar 30, 2022 1.05 Dividend
Dec 30, 2021 1.05 Dividend
Sep 29, 2021 1.05 Dividend
Jun 29, 2021 0.90 Dividend
Mar 30, 2021 0.90 Dividend
Dec 30, 2020 0.76 Dividend
Sep 29, 2020 0.76 Dividend
Jun 29, 2020 0.76 Dividend
Mar 30, 2020 0.76 Dividend
Dec 30, 2019 0.76 Dividend
Sep 27, 2019 0.76 Dividend
Jun 27, 2019 0.76 Dividend
Mar 28, 2019 0.76 Dividend
Dec 28, 2018 0.76 Dividend
Sep 27, 2018 0.69 Dividend
John Deere hopes to release an all-electric tractor by 2026:
https://www.rfdtv.com/john-deere-hopes-to-release-an-all-electric-tractor-by-2026
DE seeking satellite company_to_deliver_real-time_planting/harvesting_data_to_remote_areas_of Brazil:
https://www.wsj.com/articles/deere-seeks-satellite-network-to-connect-far-flung-farms-65c37b0f
Brazil is the number-2 market for DE's large (and technology-rich) agricultural equipment.
My mom left me a nice position in DE when she passed in 2017. Some bumps here and there, but a good ride.
Any reason to bail?
DE boosts dividend again:
https://finance.yahoo.com/news/deere-company-raises-dividend-174800137.html
Just two months ago DE raised the annualized dividend to $4.80 (#msg-170637030), and today DE is boosting it again to $5.00.
At the current share price (~$427), the new annualized payout is a yield of 1.2%.
DE, which considers itself a technology growth company rather than an industrial cyclical, has never been a big dividend payer; however, DE has now boosted the dividend by a cumulative 39% ($3.60 to $5.00) in the past 1.5 years.
DE Looking for follow through Tuesday.
https://stockcharts.com/h-sc/ui?s=RE
DE FY1Q23* results (corrected)†
FQ1Q23* was another superb quarter with volume and pricing gains in all three operating segments. Price increases more than offset increased production costs, and DE expects this to be true during all of FY2023.
• FY1Q23 product sales (excluding revenue from DE’s finance unit) were $11.40B, +34% YoY.
• FY1Q23 GAAP EPS was $6.55, +127% YoY.
DE raised FY2023* net-income guidance by $750K to a range of $8.75-9.25B. Based on 299M diluted shares @1/31/23, the net-income guidance range equates to FY2023 GAAP EPS of $29.26-30.94, representing a YoY increase of 26-33%.
At the current share price (~$425 as I’m typing), the above EPS range represents a FY2023 P/E ratio of only 14-15.
*DE’s fiscal years end on Oct 31; FY1Q23 spanned the period from 11/1/22 to 1/31/23.
†My previous version of this post had incorrect numbers for DE’s 2023 net-income guidance.
DE acquiesces on “right to repair” issue:
https://finance.yahoo.com/news/1-farm-bureau-deere-co-165457932.html
USDA expects_record—($161B)—US_net farm income in_2022, +20% YoY:
https://www.wsj.com/articles/high-commodity-prices-feed-a-boom-in-the-u-s-farm-belt-11671595947
Bullish for DE. The more profit farmers earn, the more they spend on new equipment and technology services tied to that equipment.
DE boosts annualized dividend to $4.80—(from $4.52):
https://finance.yahoo.com/news/deere-company-raises-dividend-six-190400945.html
At the current share price (~$440), the new payout is a yield of ~1.0%.
DE, which considers itself a technology growth company rather than an industrial cyclical, has never been a big dividend payer, but it has now boosted the dividend by a cumulative 33% ($3.60 to $4.80) in 2021 and 2022.
Recession?
We now have DE’s blowout results and bullish guidance (#msg-170523741) to supplement CAT’s blowout results and bullish guidance (#msg-170300076).
Can these two bellwethers both be totally wrong?
Addendum—DE’s FY4Q22 price increases more than offset increased production costs, and DE expects this to be true again during all of FY2023.
DEERE & CO
$438.55 +21.90 (+5.28%)
As of Nov-23-202212:02:55 PM ET
https://stockcharts.com/h-sc/ui?s=DE
DE FY4Q22* results…
In FQ4Q22, DE logged impressive volume and pricing gains in all three operating segments. The strong US dollar crimped ex-US sales, but this was scarcely noticeable in the overall picture.
PR:
https://www.sec.gov/Archives/edgar/data/315189/000155837022018162/de-20221123xex99d1.htm
CC slides:
https://investor.deere.com/files/doc_financials/2022/q4/DE-4Q22-Earnings-Call-Presentation.pdf
FY4Q22: Sales $15.5B, +37% YoY; GAAP EPS $7.44, +81% YoY.
FY2022 (12m): Sales $52.6B, +19% YoY; GAAP EPS $23.28, +23% YoY.
DE is today issusing guidance for FY2023* of $26.67-28.33 (based on 300M diluted shares), representing a YoY increase of 15-21%.
At the current share price (~$430), the above EPS range represents a FY2023 P/E ratio of 15-16.
*DE’s fiscal years end on Oct 31.
DE Deere beats, top & bottom
EPS actual 7.44. Consensus 7.08
Revs actual 15.54B. Consensus 13.39B
https://stockcharts.com/h-sc/ui?s=DE
DEERE & CO
$416.56 +4.86 (+1.18%) Close
pre market hours active
Pre-market
$430.06 +13.50 (+3.24%)
The stock was initially down about 4% in PM trading, but it is now flat. The CC started at 10am ET.
DE FY3Q22* results—lowers FY2022* EPS guidance slightly…
https://s22.q4cdn.com/253594569/files/doc_financials/2022/q3/DE-3Q22-News-Release-and-Financials.pdf
DE experienced high-single-digit YoY inflation in raw materials and other cost-of-sales inputs, but more than offset these increases with ~10% price YoY increases.
New FY2022 GAAP EPS guidance is $22.95-23.60 (based on 305M diluted shares), down about $0.25 from the guidance three months ago at both the lower and higher bounds of the guidance range, but still up sharply from the guidance $20.70-22.30 nine months ago.
DE’s FY2022 GAAP guidance includes a $220M ($0.71/sh) non-recurring gain in FY2Q22; without thise non-recurring item, FY2022 EPS guidance would be $22.24-22.89. At the current share price (~$364), the above EPS range represents a FY2022 P/E ratio of 15.9-16.4.
*DE’s fiscal year ends on Oct 31.
DE FY3Q22 earnings preview (Reuters):
https://finance.yahoo.com/news/deeres-sales-expected-rise-increased-201802171.html
By sustainable, do you mean shipping jobs to Mexico, or failing to provide parts and tools to repair their equipment?
Does this company focus on soil revitalization?
DE’s technology/autonomy webcast:
https://investor.deere.com/home/default.aspx#analyst
If the data depict some kind of “edge” condition, the vehicle is simply stopped, an option not available with robocars!
DE raises annualized dividend to $4.52 (from $4.20):
https://www.sec.gov/Archives/edgar/data/0000315189/000155837022009334/de-20220525xex99d1.htm
At the current share price (~$340), the new annualized payout represents a yield of 1.3%.
DE has never been a high-dividend payer, but it increases the dividend often. Today’s increase is the third in the past 15 months.
DE raises FY2022* EPS guidance again…
FY2Q22 PR:
https://s22.q4cdn.com/253594569/files/doc_financials/2022/q2/DE-2Q22-News-Release-and-Financials.pdf
CC slides:
https://s22.q4cdn.com/253594569/files/doc_financials/2022/q2/DE-2Q22-Earnings-Call-Presentation.pdf
New FY2022 GAAP EPS guidance is $22.73-24.03 (based on 308M diluted shares), up from the prior guidance of $21.30-22.60 three months ago and up further from the prior guidance $20.70-22.30 six months ago.
DE’s FY2022 GAAP guidance includes a $220M ($0.71/sh) non-recurring gain in FY2Q22; without the non-recurring item, FY2022 EPS guidance would be $22.02-23.32. At the current share price (~$337), the above EPS range represents a FY2022 P/E ratio of 14.5-15.3.
Despite all of the above, the stock is down ~7% as I’m typing. Some investors may think that FY022 represents the top of the cycle and that things can’t get any better.
*DE’s fiscal year ends on Oct 31.
New John Deere Tractors Plow Day and Night With No One in the Cab: Autonomous Farming Debuts in 2022:
https://www.goodnewsnetwork.org/new-john-deere-autonomous-farming-tractors-debut-in-2022/
Another write-up on DE’s amazing run:
https://finance.yahoo.com/news/deere-soars-ukraine-war-stokes-164402006.html
DE suspends shipments to Russia/Belarus:
https://finance.yahoo.com/news/deere-co-suspends-shipments-russia-193710522.html
The dissolution of the Deere-Hitachi JV has finally closed:
https://finance.yahoo.com/news/john-deere-acquires-deere-hitachi-220000657.html
DE raises FY2022* profit guidance despite headwinds…
FY1Q22 PR:
https://www.deere.com/en/news/all-news/fy22-first-quarter-earnings/
CC slides:
https://investor.deere.com/files/doc_financials/2022/q1/DE-1Q22-Earnings-Call-Presentation.pdf
New FY2022 GAAP EPS guidance is $21.30-22.60 (based on 314M diluted shares), up from the prior guidance of $20.70-22.30 three months ago.
*DE’s fiscal year ends on Oct 31.
Is John Deere an Underrated AI Stock?
https://www.fool.com/investing/2022/01/28/is-john-deere-an-underrated-ai-stock/
A glaring shortcoming of the Barron’s excerpt I just posted is:
#msg-167521140
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