Deere & Company: Why This Agricultural Giant’s Stock Could Keep Rising in 2025

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💡 Invest in companies you believe in - W. Buffett

Deere & Company, a global leader in agricultural and construction machinery, has delivered an impressive stock performance in 2025—even as revenue and earnings decline. Investors are betting on the company’s ability to withstand trade tensions, expand its AI-driven autonomous equipment, and benefit from improving economic conditions.

However, recent earnings reports show a 50% year-over-year drop in net income, raising doubts about its full-year guidance. Is Deere still a buy? Here’s a deep dive into the key factors shaping its future.

History of the Company

Founded in 1837 by blacksmith John Deere in Grand Detour, Illinois, Deere & Company began with a revolutionary invention—the self-scouring steel plow. Unlike traditional iron plows, Deere’s polished steel design prevented soil from sticking, dramatically improving farming efficiency in the Midwest’s tough prairie soil. Demand soared, and by 1848, Deere relocated to Moline, Illinois, leveraging the Mississippi River for transportation and scaling production to 200 plows per month.

The company was officially incorporated as Deere & Company in 1868 under the leadership of John’s son, Charles Deere, who expanded product lines to include cultivators, planters, and wagons. A pivotal moment came in 1918 when Deere acquired the Waterloo Gasoline Engine Company, entering the tractor market with the iconic Waterloo Boy, later evolving into the Model D tractor.

Throughout the 20th century, Deere grew into a global leader, diversifying into construction, forestry, and lawn-care equipment while pioneering innovations like self-propelled combines (1947) and precision agriculture technology. Today, Deere operates in over 100 countries, maintaining its legacy of quality with the motto: “Nothing Runs Like a Deere”.

Key milestones:

• 1837: First steel plow.

• 1918: Entry into tractors via Waterloo acquisition 6.

• 1950s–60s: Global expansion and industrial diversification.

• 2020s: Leader in AI-driven autonomous farming.

A Dividend Powerhouse with Reliable Growth

Deere & Company (NYSE: DE) has demonstrated a strong commitment to returning capital to shareholders through consistent dividend growth. As of 2025, the company has increased its dividend for five consecutive years .

Over the past five years, Deere has maintained an average annual dividend growth rate of approximately 14.1% . In 2023, the company raised its quarterly dividend multiple times, culminating in a 12.5% increase for the year . Additionally, Deere has been actively repurchasing its shares, enhancing shareholder value through both dividends and buybacks.

In December 2022, the company announced an $18 billion increase in its equity buyback plan, bringing the total authorization to $39 billion . This dual approach underscores Deere's robust financial health and its dedication to rewarding shareholders.

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Key Institutional Investors in Deere & Company

As of the latest data, Deere & Company (NYSE: DE) is predominantly held by institutional investors, who collectively own approximately 81.4% of the company's outstanding shares . The top institutional shareholders include:

• The Vanguard Group, Inc., holding about 21.88 million shares, representing 8.06% of total shares.

• BlackRock, Inc., with approximately 17.59 million shares, accounting for 6.48% of the company.

• State Street Corporation, owning around 10.35 million shares, or 3.81% of the total.

• Geode Capital Management, LLC, holding about 5.31 million shares, equating to 1.96% ownership.

• Capital World Investors, with approximately 6.06 million shares, representing 2.24% of Deere's shares.

What Makes Deere & Company Stand Out?

Deere & Company (NYSE: DE)

• Financial Score: 97 / 99 ⭐️⭐️⭐️⭐️⭐️+

• Industry: Farm & Heavy Construction Machinery

👉 Learn more about Financial Score

Deere & Company, founded in 1837 and headquartered in Moline, Illinois, is a global manufacturer of agricultural, construction, forestry, and turf equipment. The company operates through four segments:

• Production & Precision Agriculture: large tractors, combines, harvesters, tillage and spraying equipment.

• Small Agriculture & Turf: utility tractors, mowers, golf and sports turf equipment, and attachments.

• Construction & Forestry: excavators, loaders, dozers, graders, dump trucks, paving and logging equipment.

• Financial Services: provides financing for equipment purchases, leases, dealer inventory, and retail accounts.

Deere supports its machinery with parts, services, and extended warranties.

Deere & Company - Quick MaxDividends Team Overview

🟢 According to the latest data, the company is currently profitable. 🟢 A positive factor is the dynamics of business sales growth 🟢 The company's operating profit has been growing over the past years, which indicates the strength and sustainability of the business. 🟢 The dynamics of earnings per share are positive, the company shows good pace and stability in terms of profitability 🟢 The company's business demonstrates a high degree of sustainability and stable income generation.

Financial Statement

If you want to stay on top of your portfolio's health, don't forget to check in on the financials of the companies you've invested in. The better shape they’re in, the better your results will be. Keep an eye on their quarterly and annual reports to see how they're performing.

Here is a quick dive into Deere & Company over last years

The strongest and most stable companies tend to have a Financial Score of 80+, with the very best ones hitting 90+. If you see that score start to dip below 80, that’s your cue to consider jumping ship before things get worse.

👉 Learn More about Financial Score

Our Paid Members get access to a curated watchlist of 19,000 companies worldwide, all scored by our team on a regular basis. Companies like Deere & Company are on that list, too.

Future Growth Prospects for Deere & Company

Deere & Company (NYSE: DE) is navigating a complex landscape in 2025, balancing near-term challenges with long-term growth opportunities. The company has revised its fiscal 2025 net income forecast to a range of $4.75 billion to $5.5 billion, slightly down from previous estimates, due to factors such as global tariffs, reduced farm income, and softer demand in key markets.

Despite these headwinds, Deere is strategically investing in innovation and sustainability to drive future growth. The company is focusing on precision agriculture technologies, including autonomous tractors and AI-driven crop management tools, aiming to enhance productivity and sustainability for farmers .

Additionally, Deere plans to connect 1.5 million machines and 500 million acres of farmland to its digital platform by 2026, facilitating data-driven farming practices.

In the construction and forestry sectors, Deere is expanding its electric and hybrid equipment offerings, with plans to introduce over 20 such models by 2026 . These initiatives align with the company's commitment to sustainability and its goal to reduce operational CO₂ emissions by 50% by 2030.

While short-term market conditions remain challenging, Deere's emphasis on technological innovation and sustainable solutions positions it well for long-term growth in the evolving agricultural and construction industries.

Deere & Company Financial Performance

Deere & Company (NYSE: DE) has demonstrated mixed financial results in 2025, balancing cyclical pressures with strategic investments in innovation and operational efficiency. Here’s a breakdown of its key performance metrics and outlook:

Q2 2025 Highlights

• Revenue: $12.76 billion (-16% YoY), reflecting softer demand in agriculture and construction equipment.

• Net Income: $1.8 billion (-24% YoY), though surpassing analyst expectations due to cost controls.

• Margins: Equipment operations maintained an 18.8% operating margin, with construction segment margins dipping to 12.9% due to tariff impacts.

2025 Full-Year Guidance

• Projected net income of $4.75–5.5 billion, revised downward from earlier estimates due to trade policy uncertainties.

• Capital Allocation: $20 billion U.S. investment plan over 10 years, focusing on manufacturing expansions (e.g., new excavator factory in North Carolina).

Key Challenges

• Trade Wars: Tariffs added ~$500 million in costs, pressuring margins.

• Farm Economics: Low commodity prices and high input costs reduced equipment demand globally.

• Inventory Adjustments: Dealers are managing excess stock, delaying new orders.

Growth Drivers

• Precision Agriculture: Strong adoption of autonomous tractors and AI-driven solutions.

• Electric Equipment: Expansion into sustainable machinery (e.g., battery-electric mowers).

• Emerging Markets: Latin America and Asia show rising tech adoption rates.

Analyst Sentiment

• Average price target: $493.12 (3% downside risk).

• Consensus rating: "Outperform", citing long-term innovation potential despite near-term headwinds.

Deere’s ability to navigate cyclicality while investing in high-margin technologies positions it for recovery as macro conditions stabilize. Investors should monitor Q3 earnings (August 2025) for updates on tariff mitigation and demand trends.

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With 25+ years of consecutive dividend increases, Dividend Aristocrats are among the strongest dividend growth stocks. These companies have a proven track record of not only maintaining but consistently increasing their dividends, often outperforming the broader market over time.

Why Invest in Deere & Company?

Deere & Company (NYSE: DE) stands out as a compelling long-term investment opportunity, blending robust financial performance with a forward-thinking approach to agriculture and construction technology.

In the fiscal second quarter of 2025, Deere reported a net income of $1.8 billion, or $6.64 per share, surpassing Wall Street expectations despite a 16% year-over-year decline in revenue due to softer demand and economic uncertainties.

A key driver of Deere's resilience is its commitment to innovation in precision agriculture. The company's See & Spray™ technology utilizes advanced cameras and processors to target herbicide application, reducing chemical use and enhancing efficiency . Additionally, Deere's introduction of autonomous tractors equipped with AI and computer vision addresses labor shortages and modernizes farming practices.

Financially, Deere maintains a healthy dividend payout ratio of approximately 28.72%, indicating a balance between rewarding shareholders and reinvesting in growth . The company has also been recognized for its ethical practices, being named one of the 2025 World's Most Ethical Companies by Ethisphere for the 18th time.

With strategic investments in technology and a strong ethical foundation, Deere & Company is well-positioned to capitalize on the increasing global demand for sustainable agriculture and infrastructure solutions, making it an attractive option for investors seeking long-term growth.

Interesting Fact

An interesting fact about Deere & Company is that its iconic slogan, “Nothing Runs Like a Deere,” was originally created in 1972 to promote the company's snowmobiles—a product line that was discontinued in the 1980s.

Despite the snowmobiles' short-lived presence, the catchy slogan endured and became synonymous with Deere's commitment to quality and performance across all its equipment lines.

Today, it remains one of the most recognizable taglines in the machinery industry.

Competitors

1. Caterpillar Inc (NYSE: CAT)

• Financial Score: 97 / 99

• Industry: Farm & Heavy Construction Machinery

2. PACCAR Inc (NASDAQ: PCAR)

• Financial Score: 97 / 99

• Industry: Farm & Heavy Construction Machinery

Final Thoughts: Should You Buy Deere & Company?

Deere & Company (NYSE: DE) presents a compelling but nuanced investment case. On one hand, its strong brand, leadership in precision agriculture, and long-term innovation strategy (including autonomous and electric equipment) position it well for the future of farming and construction. The company has also demonstrated resilience during downturns, maintaining dividends for 37+ consecutive years while investing in high-margin technologies.

However, near-term challenges remain: cyclical pressures (weaker farm incomes, high interest rates), tariff-related costs, and slowing construction demand could weigh on earnings in 2025–2026. The stock’s premium valuation (P/E ~15x) suggests much of its recovery potential is already priced in.

Who Should Invest?

• Long-term investors bullish on agtech and infrastructure.

• Dividend growth seekers (though yield is modest at ~1.3%).

• Those comfortable with cyclical volatility and a 3–5 year horizon.

Current Market Value

Undervalued \ Overvalued \ Fairly Valued

• If a company's current P/E is 20% or more below the competitor average, it is considered undervalued.

• If it is 20% or more above, it is considered overvalued.

The P/E ratio is calculated by dividing the market value per share by earnings per share (EPS).

Deere & Company - Overvalued

Analysts Consensus

As of May, analysts maintain a consistent outlook on the stock with a consensus of 24 ratings, including 5 Strong Buys, 5 Buys, and 14 Holds, showing a stable sentiment over recent months.

The average analyst price target is $532.77, slightly above the current trading price of $524.78, suggesting limited short-term upside. Price forecasts range from a low of $425.00 to a high of $619.00, indicating a moderate spread in expectations among analysts.

To your wealth, MaxDividends Team

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