Deere & Company (DE): A Bull Case Theory

We came across a bullish thesis on Deere & Company on Max Dividends’s Substack by Max Dividends and Serhio MaxDividends. In this article, we will summarize the bulls’ thesis on DE. Deere & Company's share was trading at $500.98 as of August 1^st. DE’s trailing and forward P/E were 24.20 and 22.08, respectively according to Yahoo Finance.

Deere & Company (NYSE: DE), a global leader in agricultural and construction machinery, faces mixed dynamics in 2025 as it balances cyclical headwinds with long-term growth initiatives. Despite a 16% YoY revenue decline and a 24% drop in net income in Q2 2025, Deere exceeded expectations through cost controls and maintained robust operating margins. The company revised its full-year net income guidance to $4.75–5.5 billion, reflecting tariff-related costs, weak farm economics, and softer equipment demand.

Near-term pressures include trade wars, inventory adjustments, and slowing construction activity, yet Deere’s strategic investments in autonomous tractors, AI-powered crop management, and electric equipment position it for future growth. Its goal to connect 1.5 million machines and 500 million acres to its digital platform by 2026 underscores its precision agriculture leadership.Dividend investors value Deere’s consistency: the company has raised dividends for five consecutive years, with a 14% CAGR and a modest payout ratio of ~29%, alongside an aggressive share repurchase program totaling $39 billion.

Current yield stands near 1.3%, supported by strong free cash flow and disciplined capital allocation. Institutional ownership remains high at 81%, with Vanguard and BlackRock among top holders, reinforcing confidence in its fundamentals. While valuation appears elevated at ~15x earnings, long-term investors bullish on agtech and sustainability may find Deere compelling. Analysts maintain an “Outperform” rating with an average target of $533, implying limited short-term upside but meaningful potential over a 3–5-year horizon. Deere’s innovation-driven strategy and operational resilience make it a notable dividend-growth candidate amid cyclical volatility.

Previously, we covered a bullish thesis on Deere & Company by Best Anchor Stocks in May 2025, which highlighted margin resilience, EPS outperformance, and tech-driven growth. The stock has depreciated about 1.4% since then due to cyclicality and tariff pressures, though the thesis stands on strong fundamentals. Max Dividends and Serhio MaxDividends shares a similar view but emphasizes dividend growth and long-term agtech positioning.

Deere & Company is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 53 hedge fund portfolios held DE at the end of the first quarter which was 57 in the previous quarter. While we acknowledge the potential of DE as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.