Deere & Company ($DE) Earnings (Q3 FY22)

 Deere & Company ($DE) Earnings and Opinion:


Deere & Company is a company in the Industrials sector and operates in the Farm & Heavy Construction Machinery industry. The company manufactures and distributes various equipment worldwide. Deere & Company was founded in 1837 and is currently headquartered in Moline, Illinois. The company made its debut on the stock market in 1978.

Deere & Company Earnings Results:

  • Revenues of $13B beating expectations of $12.95B
  • Equipment Operation Income of $2.65B beating expectations of $2.61B
  • EPS of $6.16 missing expectations of $6.65
  • Operating cash flow of $2.18B missing expectations of $2.95B
Opinion:
Deere & Company is currently moving lower in todays trading session, as the company reported earnings before the market opened this morning. The earnings report was mixed, but overall the thing that stood out most was the miss on EPS and operating cash flow. They also guided below consensus estimates in every category except Production & Precision Agriculture sales. The CEO said that the earnings results reflected higher costs and production inefficiencies, due to ongoing supply-chain issues. The positive news that came out though, was that the company is sold out of tractors into the second quarter of next year. This could be a positive thing in that they don't have to worry about too much inventory, but could also be credited to that they can't make enough tractors due to supplies and parts not coming in on time. As far as valuation goes, the P/E ratio in Q1 was 19.02 which was higher than the industry average of 16.22. The P/S ratio was at 2.45 which was above the industry average of 1.75. The annual growth rate is something that stands out and is high for a value stock. The current ratio sits pretty at 2.07 but the debt overwhelmingly outweighs the cash. I think investors should be comfortable here though because the current ratio is fine and they generate enough cash to be able to pay off the long-term liabilities. In my opinion, this stock definitely has upside because of how established the company is. It is currently a little overvalued right now, but still wouldn't be a bad addition to the portfolio.

*Information from Yahoo Finance, CMLVIZ, Consensus Gurus, CSI Market

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