Deere and Co (DE)

[DewDiligence]

DE FY1Q24 CC transcript:

https://finance.yahoo.com/news/q1-2024-deere-co-earnings-075048457.html

[DewDiligence]

At the current share price (~$367 as I’m typing), the DE's FY2024 EPS guidance equates to a FY2024 P/E ratio of 13.6x.

[DewDiligence]

DE FY1Q24 CC slides:

https://s22.q4cdn.com/253594569/files/doc_financials/2024/q1/DE-1Q24-Earnings-Call-Presentation.pdf

[DewDiligence]

FY2023 was a peak-cycle year for DE, so FY2024 is a down year, although still the second-best earnings year in the company's history, based on current guidance.

[DewDiligence]

DE reports FY1Q24* results—reduces FY2024* guidance:

https://s22.q4cdn.com/253594569/files/doc_financials/2024/q1/DE-1Q24-News-Release.pdf

• FY1Q24 product sales (excluding revenue from DE’s finance unit) were $10.5B -24% YoY, but above the consensus figure of $10.3B.

• FY1Q24 GAAP EPS was $6.23, -5% YoY and below the consensus figure of $6.55.

• DE lowered guidance for FY2024 net income to $7.50-7.75 (from the prior range of $7.75-8.25B). Based on 281M diluted shares @1/31/24, DE’s FY2024 net-income guidance equates to FY2024 GAAP EPS of $26.70-27.20. At the midpoint of the range ($26.95), the FY2024 EPS guidance is -22% YoY relative to $34.63 in FY2023.

[bar1080]

It's almost impossible to beat Cintas Corp, which has been spectacular for several decades. Prior to 2021 CTAS only paid one annual dividend each year, but always growing rapidly

   Date	         Dividends  
  Aug 14, 2023	1.35 Dividend  
  May 12, 2023	1.15 Dividend  
  Feb 14, 2023	1.15 Dividend  
  Nov 14, 2022	1.15 Dividend  
  Aug 12, 2022	1.15 Dividend  
  May 13, 2022	0.95 Dividend  
  Feb 14, 2022	0.95 Dividend  
  Nov 12, 2021	0.95 Dividend  
  Aug 12, 2021	0.95 Dividend  
  May 13, 2021	0.75 Dividend  
  Feb 11, 2021	0.75 Dividend

[bar1080]

Deere Quarterly Dividends since 2020

   Date          Dividends 
 Sep 28, 2023	1.35 Dividend 
 Jun 29, 2023	1.25 Dividend 
 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 
 

[DewDiligence]

Never seen anything like this before from any company.

[bar1080]

Amazing

[DewDiligence]

DE raises dividend sixth time in past 2.5 years:

https://www.sec.gov/Archives/edgar/data/315189/000155837023019502/de-20231206xex99d1.htm

The new annualized payout is $5.88, up from: $5.40 in Aug 2023; $5.00 in Feb 2023; $4.80 in Dec 2022; $4.52 in May 22; $4.20 in Aug 2021; and $3.60 prior to Aug 2021.

At the current share price (~$366), the new annualized payout equates to a yield of 1.6%.

[DewDiligence]

DE FY4Q23 CC transcript:

https://finance.yahoo.com/news/q4-2023-deere-co-earnings-052533425.html

[DewDiligence]

DE reports FY4Q23* results—issues (down) FY2024* guidance:

https://www.deere.com/assets/pdfs/common/news/deere-4q23-earnings-release.pdf

• FY4Q23 product sales (excluding revenue from DE’s finance unit) were $13.8B, -4% YoY.

• FY4Q23 GAAP EPS was $8.26, +11% YoY.

• DE issued new guidance for FY2024 net income of $7.75-8.25B. Based on 285M diluted shares @10/31/23, DE’s FY2024 net-income guidance equates to FY2024 GAAP EPS of $27.20-28.95, -16-21% YoY relative to $34.63 in FY2023, but +17-24% relative to $23.28 in FY2022.

The stock is down ~5% in PM trading, presumably on the FY2024 guidance. Most investors realized that FY2023 was likely going to be the top of the current ag and construction cycle, but the magnitude of the reduction in FY2024 net-income guidance relative to FY2023 is larger than many investors probably expected.

At the current share price (~$363 as I’m typing), the FY2024 EPS guidance equates to a FY2024 P/E ratio of about 13.


CC slides:
https://s22.q4cdn.com/253594569/files/doc_financials/2023/q4/DE-4Q23-Earnings-Call-Presentation.pdf

*DE’s fiscal years end on Oct 31; FY4Q23 spanned the period from 8/1/23 to 10/31/23.

[DewDiligence]

DE FY4Q23 CC 11/22/23 9am ET.

[bar1080]

  Date       	Dividends 
 Jun 29, 2023	1.25 Dividend 
 Mar 30, 2023	1.25 Dividend 
 Dec 29, 2022	1.2 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	0.9 Dividend 
 Mar 30, 2021	0.9 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

[DewDiligence]

DE boosts dividend fifth time_in past two years:

https://www.sec.gov/Archives/edgar/data/315189/000155837023015338/de-20230830xex99d1.htm

The new annualized payout is $5.40, up from: $5.00 in Feb 2023; $4.80 in Dec 2022; $4.52 in May 22; $4.20 in Aug 2021; and $3.60 prior to Aug 2021.

In other words, DE has raised the dividend by a cumulative 50%(!) in the past two years.

At the current share price ($413), the new annualized payout is a yield of 1.3%.

[DewDiligence]

DE FY3Q23 CC transcript:

https://finance.yahoo.com/news/q3-2023-deere-co-earnings-042634735.html

[DewDiligence]

DE reports FY3Q23* results— raises fiscal-year guidance again:

https://www.deere.com/assets/pdfs/common/news/deere-3q23-earnings-release.pdf

FY3Q23 was another excellent quarter in all operating segments. Price increases more than offset increased production costs, and DE expects this to be true during all of FY2023.

• FY3Q23 product sales (excluding revenue from DE’s finance unit) were $14.3B, +10% YoY.

• FY3Q23 GAAP EPS was $10.20, +66% YoY.

DE again raised FY2023 net-income guidance to a range of $9.75-10.0B (up from $9.25-9.50B three months ago and $8.75-9.25B six months ago).

Based on 292M diluted shares @7/31/23, DE’s FY2023 net-income guidance equates to FY2023 GAAP EPS of $33.40-34.25, +43-47% YoY relative to $23.28 in FY2022, and +76-80%(!) relative to $18.99 in FY2021.

At the current share price (~$400 as I’m typing), the FY2023 EPS guidance equates to a FY2023 P/E ratio of about 12.

The stock is down today because investors are apparently concluding that the global agricultural-equipment market cannot get any better.

CC slides:
https://s22.q4cdn.com/253594569/files/doc_financials/2023/q3/DE-3Q23-Earnings-Call-Presentation.pdf

*DE’s fiscal years end on Oct 31; FY3Q23 spanned the period from 5/1/23 to 7/31/23.

[Bountiful_Harvest]

Why Deere (DE) is a Top Stock for the Long-Term

https://finance.yahoo.com/news/why-deere-top-stock-long-133004850.html

https://seekingalpha.com/article/4619123-deere-stock-strong-demand-automated-solutions

https://www.tipranks.com/news/article/deere-stock-nysede-ai-upside-doesnt-look-priced-in-yet

https://finmasters.com/stock-calculator/?sa=DE&d=20040810&a=20000

[Bountiful_Harvest]

John Deere to discuss state of agrobotics in RoboBusiness keynote:

https://www.therobotreport.com/john-deere-to-discuss-state-of-agrobotics-in-robobusiness-keynote/

John Deere Announces New Partnership With EGO:

https://www.deere.com/en/news/all-news/john-deere-announces-new-partnership-with-ego/

[bar1080]

"Deere makes major announcement about future of lawn equipment: ‘[We want] to serve our evolving customers’"

"For millions of homeowners, mowing the law just got a whole lot greener now that lawncare giants John Deere and EGO are working together, Electrek reported.

EGO is a leading supplier of battery-powered lawn equipment that runs on interchangeable 56-volt lithium-ion batteries, which the company says are equal to or greater than the power of gas-powered motors.

Under the agreement, EGO’s over 70 battery-powered lawn care products will be available at John Deere dealers in Canada and the U.S. this fall, according to Electrek. The publication further reported that the companies are in talks to develop future equipment together.

Lawn care equipment is a major contributor to the pollution blanket overheating our planet. The Portland Press Herald reported that data from the Environmental Protection Agency (EPA) showed that gasoline-powered equipment like lawnmowers and leaf blowers produce around 242 million tons of pollutants annually, an amount equal to that of cars and houses."

"What’s more, the EPA estimated that upward of 17 million gallons of gasoline is spilled each year while refueling lawn equipment, polluting and degrading soil, and ending up in our water"

https://news.yahoo.com/john-deere-makes-major-announcement-110000162.html

[bar1080]

I didn't realize today was Deere's all-time high. Not totally thrilled because I had intended to buy much more DE before it took off.

[Monksdream]

DE new 52 week high

[bar1080]

"California woman lying in grass killed by Deere lawnmower, a advocates, family question police"

https://www.usatoday.com/story/news/nation/2023/07/19/christine-chavez-lawnmower-killing-modesto-concerns/70433060007/

[bar1080]

yes lots considering..."Our data suggests that insiders own under 1% of Deere & Company in their own names. As it is a large company, we'd only expect insiders to own a small percentage of it. But it's worth noting that they own US$144m worth of shares.

https://simplywall.st/stocks/us/capital-goods/nyse-de/deere/news/after-losing-10-in-the-past-year-deere-company-nysede-instit

[DewDiligence]

DE CEO sells ~$22M of stock in 10b5-1 plan:

https://www.sec.gov/Archives/edgar/data/315189/000031518923000020/xslF345X04/primary_doc.xml

That’s a lot of stock.

[bar1080]

Was just reviewing my stocks especially the DE I bought about three weeks ago

[DewDiligence]

Are you referring to #msg-172016968?

[bar1080]

That was a fast 9% profit on DE so far.

[DewDiligence]

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

[DewDiligence]

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.

[bar1080]

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)

[DewDiligence]

DE is a buy-and-hold-forever kind of stock, IMO. I don’t sweat the small stuff.

[bar1080]

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.

[DewDiligence]

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.

[DewDiligence]

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.

[DewDiligence]

DE FY2Q23 CC slides:

https://s22.q4cdn.com/253594569/files/doc_financials/2023/q2/DE-2Q23-Earnings-Call-Presentation.pdf

[DewDiligence]

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.

[Gpheart2016]

What happened? $386, then it drops to $372?

[bar1080]

"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

[bar1080]

Howard Buffett & Deere

[bar1080]

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

[bar1080]

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 
 

[Bountiful_Harvest]

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

[DewDiligence]

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.

[Muddy2]

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?

[Bountiful_Harvest]

John Deere discussing driverless tractors:

https://www.thetelegraph.com/news/article/future-autonomous-farming-equipment-taking-shape-17856386.php

https://finance.yahoo.com/news/bull-day-deere-co-090009744.html

[DewDiligence]

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.

[MiamiGent]

DE Looking for follow through Tuesday.

https://stockcharts.com/h-sc/ui?s=RE

[DewDiligence]

DE FY1Q23 CC transcript:

https://finance.yahoo.com/news/q1-2023-deere-co-earnings-061708790.html

[DewDiligence]

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.