Value
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 3.8 |
| P/S | 8.0 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 4.7 |
| PEG | 4.7 |
| Analyst target | 4.0 |
- ▸Forward P/E: 26.3x
- ▸PEG: 1.83
DE · Why this verdict
Why Deere & (DE) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictSELL
Overall score4.3/10
ConfidenceHIGH
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Deere has sustained a four-quarter earnings beat streak and trades with positive price momentum, but revenue has declined 11% and free cash flow represents only 23% of reported net income—raising serious questions about earnings quality—while the stock sits within less than 1% of its analyst price target, leaving essentially no upside cushion from current levels.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Despite top-line pressure, the company has beaten earnings estimates in each of the past four quarters, including a 14% upside surprise most recently, demonstrating an ability to manage costs and margins even in a revenue headwind. Earnings | EPS beats continue in at least 3 of the next 4 reported quarters with a positive average surprise. | →Stable |
| CounterBeating a declining earnings estimate is a low bar; if the consensus continues to ratchet down ahead of each quarter, the beat streak reflects lowered expectations rather than genuine operational outperformance, and may coincide with ongoing fundamental deterioration. | ||
The stock is just below the consensus analyst price target, leaving roughly 0.8% headroom to that level, which means the current price already reflects the market's best-case view and provides no meaningful reward for new buyers relative to the downside risk. Bear case | Analyst consensus price target rises at least 10% above current price within 12 months, reopening a meaningful reward-to-risk gap. | →Stable |
| CounterAnalyst targets tend to lag price—if the operating environment improves materially, sell-side upgrades could quickly reset targets higher and the current near-target positioning would be seen as a floor rather than a ceiling. | ||
Revenue declined 11% in the most recent period, and free cash flow represented only 23% of net income—a significant gap that flags the quality of reported earnings and suggests the business is consuming more cash than the income statement implies. Quality breakdown | Revenue growth turns positive on a year-over-year basis and free cash flow rises to at least 50% of net income for 2 consecutive quarters. | →Stable |
| CounterHeavy equipment businesses routinely show FCF/NI below 100% during upcycles when working capital builds ahead of demand; if the cycle turns, cash conversion could normalize quickly, vindicating the earnings quality concern as timing rather than structural. | ||
With a debt-to-equity ratio of 3.8 and a dividend payout that equates to 113% of some earnings measures, the financial structure leaves limited cushion if cash generation softens further, and the dividend may be drawing on sources beyond current earnings. Catalyst breakdown | Free cash flow rises to cover the annual dividend by at least 1.2 times within the next 12 months, without additional debt issuance. | →Stable |
| CounterMachinery businesses with financing divisions routinely carry elevated leverage ratios that are standard for the industry structure; the headline D/E may overstate actual balance-sheet risk if a material portion of debt is matched by finance-division receivables. | ||
Despite top-line pressure, the company has beaten earnings estimates in each of the past four quarters, including a 14% upside surprise most recently, demonstrating an ability to manage costs and margins even in a revenue headwind.
→StableEarnings
- Expectation
- EPS beats continue in at least 3 of the next 4 reported quarters with a positive average surprise.
CounterBeating a declining earnings estimate is a low bar; if the consensus continues to ratchet down ahead of each quarter, the beat streak reflects lowered expectations rather than genuine operational outperformance, and may coincide with ongoing fundamental deterioration.
The stock is just below the consensus analyst price target, leaving roughly 0.8% headroom to that level, which means the current price already reflects the market's best-case view and provides no meaningful reward for new buyers relative to the downside risk.
→StableBear case
- Expectation
- Analyst consensus price target rises at least 10% above current price within 12 months, reopening a meaningful reward-to-risk gap.
CounterAnalyst targets tend to lag price—if the operating environment improves materially, sell-side upgrades could quickly reset targets higher and the current near-target positioning would be seen as a floor rather than a ceiling.
Revenue declined 11% in the most recent period, and free cash flow represented only 23% of net income—a significant gap that flags the quality of reported earnings and suggests the business is consuming more cash than the income statement implies.
→StableQuality breakdown
- Expectation
- Revenue growth turns positive on a year-over-year basis and free cash flow rises to at least 50% of net income for 2 consecutive quarters.
CounterHeavy equipment businesses routinely show FCF/NI below 100% during upcycles when working capital builds ahead of demand; if the cycle turns, cash conversion could normalize quickly, vindicating the earnings quality concern as timing rather than structural.
With a debt-to-equity ratio of 3.8 and a dividend payout that equates to 113% of some earnings measures, the financial structure leaves limited cushion if cash generation softens further, and the dividend may be drawing on sources beyond current earnings.
→StableCatalyst breakdown
- Expectation
- Free cash flow rises to cover the annual dividend by at least 1.2 times within the next 12 months, without additional debt issuance.
CounterMachinery businesses with financing divisions routinely carry elevated leverage ratios that are standard for the industry structure; the headline D/E may overstate actual balance-sheet risk if a material portion of debt is matched by finance-division receivables.
Per-dimension breakdown
Quality
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 6.1 |
| ROA | 2.6 |
| Gross margin | 1.2 |
| Op margin | 7.0 |
| Net margin | 5.1 |
| Current ratio | 7.6 |
| FCF quality | 1.8 |
| Moat | 3.6 |
| Piotroski F | 4.4 |
- ▸Earnings quality RED FLAG: 23% FCF/NI
- ▸No competitive moat
Growth
0.1/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 0.0 |
| EPS growth | 0.3 |
- ▸Declining revenue: -11%
Momentum
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.5 |
| Price target | 5.5 |
| erm sentiment | 5.0 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
3.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.9 |
| quality rank | 7.3 |
| growth rank | 0.8 |
Technical
3.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.4 |
| 52w position | 8.5 |
Risk (lower is worse)
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.1 |
| days to cover | 6.7 |
| volatility | 5.5 |
| put call | 4.3 |
| implied vol | 6.4 |
| beta | 7.4 |
| debt equity | 1.2 |
- ▸Concentration risks: 2 MED (10-K Item 1A)
Catalyst
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 6.9 |
| dividend safety | 5.2 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 108.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:6.8>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:55d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.5=NEGATIVE
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.45
Upside
-6.8%
Downside
15.0%
Sizing output
AVOID
SetupBREAKOUT — Golden cross, above all MAs, RSI 63, MACD bullish
EdgeNO_EDGE — No clear edge identified
SuitabilityMODERATE — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 2.8 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Momentum at 6.8) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.5=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.45 — supplementary context, not the trigger for this path.
The strongest dimensions are Momentum at 6.8, Catalyst at 6.4, and Sentiment at 6.2; the weakest are Growth at 0.1, Technical at 3.0, and Peer rank at 3.8. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of -0.45 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1The stock is just below the consensus analyst price target, leaving roughly 0.8% headroom to that level, which means the current price already reflects the market's best-case view and provides no meaningful reward for new buyers relative to the downside risk.
Trip ifAnalyst consensus price target rises more than 10% above the current price, restoring meaningful upside headroom.
- P2Revenue declined 11% in the most recent period, and free cash flow represented only 23% of net income—a significant gap that flags the quality of reported earnings and suggests the business is consuming more cash than the income statement implies.
Trip ifRevenue growth rises above 5% year-over-year for 2 consecutive quarters, signaling a reversal of the recent 11% decline.
- P3Despite top-line pressure, the company has beaten earnings estimates in each of the past four quarters, including a 14% upside surprise most recently, demonstrating an ability to manage costs and margins even in a revenue headwind.
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P4With a debt-to-equity ratio of 3.8 and a dividend payout that equates to 113% of some earnings measures, the financial structure leaves limited cushion if cash generation softens further, and the dividend may be drawing on sources beyond current earnings.
Trip ifFree cash flow rises above 80% of net income for 2 consecutive quarters.