Deere and Company (DE) earnings report for the 3rd quarter of their 2021 fiscal year
Category: Deere and Company (DE)
Date: 23 August 2021 Stock Price of Deere and Company: $351.43 Market Capital of Deere: $109.6 billion We take a look at the 3rd quarter 2021 earnings report from Deere and Company the tractor and agricultural machinery equipment supplier. For the quarter the group reported revenues of $11.5 billion and net income of $1.67 billion.
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With another quarter of solid performance, John Deere closed out the first half of the year on a highly encouraging note - said John C. May, chairman and chief executive officer"
About Deere and Company
John Deere has developed a strategy to grow and sustain its successful global business. To learn more about our strategy, please watch the video featuring Chairman and CEO Sam Allen.
Since 1837, John Deere has capitalized on the opportunities presented by increasing population, prosperity, and urbanization. Today, broad trends based on population and income growth, especially in developing nations, are driving agricultural output and infrastructure investment. Further, technological advances and agricultural mechanization are expanding existing markets and opening new ones.
We believe John Deere is exceptionally well-positioned to seize these opportunities and fulfill our higher purpose of helping improve living standards for people everywhere through our commitment to those linked to the land.
Since 1837, John Deere has capitalized on the opportunities presented by increasing population, prosperity, and urbanization. Today, broad trends based on population and income growth, especially in developing nations, are driving agricultural output and infrastructure investment. Further, technological advances and agricultural mechanization are expanding existing markets and opening new ones.
We believe John Deere is exceptionally well-positioned to seize these opportunities and fulfill our higher purpose of helping improve living standards for people everywhere through our commitment to those linked to the land.
Overview of Deere and Company's 3rd quarter 2021 earnings report
- Equipment-division operating margin of 19% demonstrates strong execution in face of supply chain challenges.
- Full-year earnings forecast raised to range of $5.7 to $5.9 billion, reflecting robust market conditions.
- Strategic investments reinforce focus on delivering customer value.
- Net sales: $11.5 billion
- Net income: $1.67 billion
- Earnings per share: $5.32
Deere and Company management commentary on their 3rd quarter 2021 earnings
MOLINE, Illinois (August 20, 2021) — Deere & Company reported net income of $1.667 billion for the third quarter ended August 1, 2021, or $5.32 per share, compared with net income of $811 million, or $2.57 per share, for the quarter ended August 2, 2020. For the first nine months of the 2021 fiscal year, net income attributable to Deere & Company was $4.680 billion, or $14.86 per share, compared with $1.993 billion, or $6.30 per share, for the same period last year.
Worldwide net sales and revenues increased 29 percent, to $11.527 billion, for the third quarter of 2021 and rose 27 percent, to $32.697 billion, for nine months. Net sales of the equipment operations were $10.413 billion for the quarter and $29.461 billion for nine months, compared with $7.859 billion and $22.612 billion for the same periods last year, respectively.
“Our strong results, driven by essentially all product categories, are a testament to the exceptional efforts of our employees and dealers to keep our factories running and customers served while enduring significant supply-chain pressures,” said John C. May, chairman and chief executive officer. “We also made strategic investments in the quarter aligned with our smart industrial strategy. They will further our efforts to help our customers achieve improved profitability, productivity, and sustainability through the effective use of technology.”
Worldwide net sales and revenues increased 29 percent, to $11.527 billion, for the third quarter of 2021 and rose 27 percent, to $32.697 billion, for nine months. Net sales of the equipment operations were $10.413 billion for the quarter and $29.461 billion for nine months, compared with $7.859 billion and $22.612 billion for the same periods last year, respectively.
“Our strong results, driven by essentially all product categories, are a testament to the exceptional efforts of our employees and dealers to keep our factories running and customers served while enduring significant supply-chain pressures,” said John C. May, chairman and chief executive officer. “We also made strategic investments in the quarter aligned with our smart industrial strategy. They will further our efforts to help our customers achieve improved profitability, productivity, and sustainability through the effective use of technology.”
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Company Outlook & Summary
Net income attributable to Deere & Company for fiscal 2021 is forecasted to be in a range of $5.7 billion to $5.9 billion. “Looking ahead, we expect demand for farm and construction equipment to continue benefiting from favorable fundamentals,” May said. “We are, at the same time, excited by the growing engagement with our digital platform, the John Deere Operations Center, as well as continued adoption of precision technologies, which unlock greater value for our customers.”
Net income attributable to Deere & Company for fiscal 2021 is forecasted to be in a range of $5.7 billion to $5.9 billion. “Looking ahead, we expect demand for farm and construction equipment to continue benefiting from favorable fundamentals,” May said. “We are, at the same time, excited by the growing engagement with our digital platform, the John Deere Operations Center, as well as continued adoption of precision technologies, which unlock greater value for our customers.”
Deere and Company (DE) stock price chart over the last 5 years
The image below shows the stock price history of Deere and Company (NYSE: DE) for the last 5 years. And its been a very good time for Deere and Company stockholders. Over the last 5 years the stock of Deere and Company increased by 330.6 % over the last 5 years.
The stock of Deere and Company is trading at a little closer to its 52 week high than it is to its 52 week low which is a clear indication that the short term sentiment and momentum of Deere and Company's stock is very positive at this point in time
The stock of Deere and Company is trading at a little closer to its 52 week high than it is to its 52 week low which is a clear indication that the short term sentiment and momentum of Deere and Company's stock is very positive at this point in time
Deere and Company (DE) stock vs Caterpillar (CAT) stock over the last 5 years
The image below shows the stock price performance of Deere and Company (DE) compared to the stock price performance of Caterpillar (CAT) over the last 5 years. As the image below shows the trend of these two companies' stock price is very similar. The summary below shows the stock price returns provided by these two firms over the last 5 years.
The stock of Deere has easily outperformed that of Caterpillar over the last 5 years.
- Deere and Company (DE): 330.6%
- Caterpillar (CAT): 149%
The stock of Deere has easily outperformed that of Caterpillar over the last 5 years.
Our latest Deere and Company (DE) stock forecast
So what do we value the stock of Deere and Company at based on their latest set of earnings report and fiscal guidance provided? Considering the news of a share buy back, their strong cash generation and moderate inventory and accounts receivable levels our valuation model provides a target price (full value price) for Deere and Company at $296.70 a stock (up from our 2nd quarter 2021 earnings report valuation of Deere and Company). We therefore believe the stock of Deere and Company is overvalued
We usually recommend that long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price) which is $296.70 in this case. A good entry point into Deere and Company would therefore be at $267 or below.
We expect the stock of Deere and Company to pull back from its current price to levels closer to our target price in coming weeks and months.
We usually recommend that long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price) which is $296.70 in this case. A good entry point into Deere and Company would therefore be at $267 or below.
We expect the stock of Deere and Company to pull back from its current price to levels closer to our target price in coming weeks and months.
Next earnings release of Deere and Company
It is expected that Deere and Company will release their 4th quarter 2021 earnings report in late November 2021