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Category: Deere and Company (DE)
Date: 22 May 2021 Stock Price of Deere and Company: $359.75 Market Capital of Deere: $112.8 billion We take a look at the 2nd quarter 2021 earnings report from Deere and Company the tractor and agricultural machinery equipment supplier. For the quarter the group reported revenues of $12.06 billion and net income of $1.79 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 4th quarter 2020 earnings report
- Second-quarter earnings rise on 34% increase in net sales, reflecting strong market conditions and broad improvement across divisions and geographies.
- Equipment-division operating margin of 19.5% demonstrates solid execution, impact of strategy.
- Full-year earnings forecast raised to range of $5.3 to $5.7 billion.
- PE ratio of Deere and Company: 18.9
- Diluted number of shares outstanding: 315.6 million (down from 316.7 million for the same quarter of the previous year)
Deere and Company management commentary on their 2Q 2021 earnings
MOLINE, Illinois (May 21, 2021) — Deere & Company reported net income of $1.790 billion for the second quarter ended May 2, 2021, or $5.68 per share, compared with net income of $666 million, or $2.11 per share, for the quarter ended May 3, 2020. For the first six months of the year, net income attributable to Deere & Company was $3.013 billion, or $9.55 per share, compared with $1.182 billion, or $3.73 per share, for the same period last year.
Worldwide net sales and revenues increased 30 percent, to $12.058 billion, for the second quarter of 2021 and rose 25 percent, to $21.170 billion, for six months. Net sales of the equipment operations were $10.998 billion for the quarter and $19.049 billion for six months, compared with $8.224 billion and $14.754 billion last year.
“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. “Our results received support across our entire business lineup, reflecting healthy worldwide markets for farm and construction equipment. Our smart industrial operating strategy is continuing to have a significant impact on performance while also helping customers do their jobs in a more profitable and sustainable manner.”
Worldwide net sales and revenues increased 30 percent, to $12.058 billion, for the second quarter of 2021 and rose 25 percent, to $21.170 billion, for six months. Net sales of the equipment operations were $10.998 billion for the quarter and $19.049 billion for six months, compared with $8.224 billion and $14.754 billion last year.
“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. “Our results received support across our entire business lineup, reflecting healthy worldwide markets for farm and construction equipment. Our smart industrial operating strategy is continuing to have a significant impact on performance while also helping customers do their jobs in a more profitable and sustainable manner.”
Company Outlook & Summary
Net income attributable to Deere & Company for fiscal 2021 is forecast to be in a range of $5.3 billion to $5.7 billion. “While the company is clearly performing at a high level, Deere expects to see increased supply-chain pressures through the balance of the year,” May said. “We are working closely with key suppliers to secure the parts and components that our customers need to deliver essential food production and infrastructure. Despite these challenges, Deere is on track for a strong year and we believe is well-positioned to unlock greater value for our customers and other stakeholders in the future.
Net income attributable to Deere & Company for fiscal 2021 is forecast to be in a range of $5.3 billion to $5.7 billion. “While the company is clearly performing at a high level, Deere expects to see increased supply-chain pressures through the balance of the year,” May said. “We are working closely with key suppliers to secure the parts and components that our customers need to deliver essential food production and infrastructure. Despite these challenges, Deere is on track for a strong year and we believe is well-positioned to unlock greater value for our customers and other stakeholders in the future.
Deere and Company (DE) stock price history 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 322 % 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 ( NYSE:DE) stock price history over the last 5 years
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): 322%
- Caterpillar (CAT): 216.4%
The stock of Deere has easily outperformed that of Caterpillar over the last 5 years.
Deere and Company (DE) stock vs Caterpillar (CAT) stock over the last 5 years
Our latest Deere and Company (DE) stock valuation
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 $180.40 a stock (up from our 4th quarter 2020 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 $180.40 in this case. A good entry point into Deere and Company would therefore be at $162.40 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 $180.40 in this case. A good entry point into Deere and Company would therefore be at $162.40 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.
John Deere agricultural equipment
Next earnings release of Deere and Company
It is expected that Deere and Company will release their 3rd quarter 2021 earnings report in late August 2021