As murky as the outlook for farming and construction equipment is, Deere & Company's (NYSE: DE) operational quality and capital return have its stock price on track to hit a fresh high soon. The critical details from the Q3 release include top and bottom-line strengths, favorable guidance despite challenging conditions, robust capital return, and a pledge to continue working on costs.
The takeaway is that Deere & Company's business contraction is severe but not as bad as expected, and the company is healthy enough to withstand whatever may come while paying its dividend and buying back shares. The odds are high that headwinds will diminish over the next two to three quarters, allowing the company to return to top-line growth in calendar 2025 because the FOMC is expected to cut rates soon.
Deere & Company Results Not As Bad As Feared
Deere & Company had a decent quarter regarding expectations, but the bar was set low, and the 16.8% decline could have been better. However, the results are 2000 basis points better than the consensus estimate, and relative strength was seen through to the bottom line, allowing the market to advance. Segmentally, Production & Precision Agriculture was weakest with a 25% decline, followed by an 18% contraction in ...
