Background: FY2023* was a peak-cycle year in the agriculture-equipment market (which comprises ~70% of DE’s profits), and hence FY2024* was a down year. DE expects FY2025* to be another down year; on today’s CC, DE described the outlook for FY2025 as “80% of mid-cycle.”
Details: FY2025 net income is expected to be $5.0-5.5B, down from $7.1B in FY2024 and $10.2B in FY2023. Based on an estimated 260M diluted shares, the FY2025 net-income guidance equates to FY2025 GAAP EPS of $19.23-21.15, down from $25.62 in FY2024 and $34.63 in FY2023.
At the current share price (~$440 as I’m typing), the guidance for FY2025 EPS represents a forward P/E of 21-23x.
Based on all of the above, the share price today is +9% to within a hair of its all-time high of $450 in 2023. Why does this make sense? Because DE is a rather different company than it was only a few years. It is now more of a tech company—with material recurring service revenues—than the “boring” cyclical industrial it used to be.
Market Data 
Markets 
AI
