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Deere’s Strong Q2 Results Leads Management to Raise 2021 Guidance

Dawit Woldemariam Equity Analyst

Analyst Note

| Dawit Woldemariam |

Deere posted impressive second-quarter results, as agriculture markets continue to show strength globally. We’ve increased our fair value estimate to $248 per share from $236 to reflect stronger end-market performance in the near term. In the quarter, equipment sales surged to $11 billion, up 34% year over year. Operating profit more than doubled to $2.1 billion compared with the same period a year ago, largely because of stronger volume and favorable sales mix (increased large agriculture equipment sales). Deere also benefited from strong pricing in the quarter, mostly due to adjustments made in mid-2020 in response to foreign currency headwinds.

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Company Profile

Business Description

Deere is the world’s leading manufacturer of agricultural equipment, producing some of the most recognizable machines in the heavy machinery industry. The company is divided into four reportable segments: production and precision agriculture, small agriculture and turf, construction and forestry, and John Deere Capital Corporation. Its products are available through a robust dealer network, which includes over 1,900 dealer locations in North America and approximately 3,700 locations globally. John Deere Capital Corporation provides retail financing for machinery to its customers, in addition to wholesale financing for dealers; which increases the likelihood of Deere product sales.

Contact
One John Deere Place
Moline, IL, 61265
T +1 309 765-8000
Sector Industrials
Industry Farm & Heavy Construction Machinery
Most Recent Earnings Apr 30, 2021
Fiscal Year End Nov 1, 2021
Stock Type Cyclical
Employees 69,600

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