The Rising Influence of Rising Affluence

[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.