QS Research · Michael Burry's Scion Capital analyst template · 2006
DEERE & CO (DE)
As of 2026-11-08 · 12/15 boxes filled from SEC filings and market data
Conclusion: LONG
Conviction medium · base case +31% · downside -2% · upside +38%
Deere is a cyclical franchise, not a broken one: FY2023 revenue of $61.25B fell to $45.68B in FY2025, but FY2020-FY2025 average net income was $6.36B versus $4.87B TTM, and average FCF was $6.32B versus $6.02B TTM. At today's 37.2x P/E, the normalized $6.36B base is $236.6B of equity, or $877/share (+31%); the FY2026 guidance low of $4.75B at the same multiple gives $655 (-2%), and the cited 2027 EPS estimate of $25 gives $930 (+39%). The market is capitalizing depressed TTM earnings at a high multiple rather than paying for normalization; the catalysts are the raised FY2026 net income range, management's 2026 cycle-bottom call, and Q4 results due 2026-11-25. This is a long on cycle recovery, but only medium conviction because the multiple is high versus peers and tariff recoveries flatter reported earnings.
Key numbers
- Share price: $671.65
- Market cap: $181.09B
- Latest financial period: TTM to Aug 2, 2026
- Revenue (TTM): $47.98B
- EV / EBITDA (TTM): 16.2x
- P/E (TTM): 37.2x
- Price / book: 6.47x
The 15 boxes
- ✓ 1. Long-form business notes
Deere is a four-segment equipment-and-finance business (PPA, SAT, CF, Financial Services in the FY2025 10-K) that was three segments (ag & turf, construction & forestry, financial services) in the FY2020 10-K, sold mainly through independent dealers with an in-house captive finance arm. The cycle in the only data provided is steep down: revenue $61.25B FY2023, $51.72B FY2024, $45.68B FY2025, with net income $10.17B, $7.10B, $5.03B and operating cash flow still $7.46B in FY2025 against $1.36B capex. FY2025 operating income is not populated in the data, so the downward cycle has to be read off pre-tax income ($6.26B), net income and cash flow. No quarterly or TTM figures exist in these sources, so a TTM column cannot be shown from them.
- ✓ 2. Competitive advantage
Deere's advantage is real but cyclical, not a compounding margin machine: the John Deere brand, a ~2,050-location North American dealer network, proprietary parts and IP are named by the company as competitive factors, and they carried FY2023 operating income of $12.96B on revenue of $61.25B. As revenue fell to $51.72B (FY2024) and $45.68B (FY2025), net income fell from $10.17B to $7.10B to $5.03B and operating cash flow from $9.23B to $7.46B — a durable franchise with a deeply cyclical earnings stream, facing AGCO, CLAAS, CNH, Kubota, Toro in ag and Caterpillar, Komatsu, Volvo CE, SANY, XCMG and others in construction.
- ✓ 3. 10-Q takeaways
Q3 FY2026 (quarter ended 2026-08-02) net sales and revenues rose 5% to $12,608M with net income up 7% to $1,379M ($5.10 diluted), but nine-month net income is still down 4% to $3,808M on tariffs and prior-year tax items — PPA declined while SAT and CF carried the quarter. Deere raised FY2026 net income guidance to $4.75–5.00B and stated that order book trends reinforce 2026 as the bottom of the ag equipment cycle. Cash generation weakened modestly (operating cash flow $3,250M vs $3,464M in the first nine months) while inventory and receivables built seasonally, and $2,013M was returned to shareholders in the first nine months.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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