Credit Suisse Sees Demand Trends Strong Across Deere's Portfolio

  • Credit Suisse’s analyst, Jamie Cook, met with Deere & Company DE Investor Relations team, including Deputy Financial Officer Josh Jepsen and Head of Investor Relations, Brent Norwood.
  • The analyst maintained his Outperform rating on the shares and the price target of $472 post the meeting.
  • Cook believes that Deere’s technological adoption is accelerating. Higher input costs and resource scarcity are driving technology adoption, resulting in significant savings and the potential to manage resources better.
  • According to the analyst, as the precision AG business model evolves, Deere sees a greater opportunity to monetize the value it provides for its customers through pay per use or per acre rather than a point of sale. He argues that increasing the price per acre or use over time will assist in decreasing the amplitude of cycles.
  • Cook expects that shifting to a pay-per-acre or pay-per-use model will increase Deere’s market share among smaller farmers and contractors by eliminating hefty upfront expenses, which have traditionally been a deterrent for smaller clients.
  • The order book for 2023 appears to be quite promising. The supply chain issues persist, but they are in line with expectations.
  • Price Action: DE shares are trading lower by 2.71% at $326.14 on the last check Monday.

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