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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Deere & Company (XNYS:DE) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
DE
Name:
DEERE & COMPANY (XNYS:DE)
Sector:
25.00M
Industry:
Farm & Heavy Construction Machinery
CEO:
Mr. John May
Total Employees:
75,550
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is 0.27% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF DEERE & COMPANY(DE) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND FARM & HEAVY CONSTRUCTION MACHINERY INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
362.22
One Month Price Target:
$364.37
Six Month Price Target :
$375.15
Likely Price in One Year's Time:
Ticker:
$388.08
Likely Trading Range Today Under (Normal Volatility)
$361.24
Price Upper limit ($) :
$364.21
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$344.79
This week:
$323.24
This month :
$284.25
Other Primary facts
Market Cap:
108.96B
Market Cap Classification:
Large Cap
Number of Shares
IPO Date:
301.82M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
13.36%
-14.07%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$442.99
$405.13
$281.45
$319.31
Medium risk (<10%) entry points
Buy Call
Sell Call
$392.81
Buy Put:
Sell Put:
$384.72
$331.53
$339.72
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
DE
Sharpe Ratio:
5.42%
Comparison:
DE, is amongst the top 20% stocks with highest risk-adjusted returns
Sharpe ratio is 166.29% higher than the industry
& ratio is 137.96% higher than the market/S&P 500 average
Average Returns/Yield of
DE
Daily returns:
0.14%
Weekly returns:
0.70%
Monthly returns:
2.79%
Yearly returns:
21.02%
Comparison of returns:
Average annual returns/yield (last 3 years) is 59.41% above industry average
Classification:
DE, is amongst the top 20% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.54
Statistical test of Returns:
DE has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.41%
Weekly Volatility:
5.39%
Monthly Volatility:
10.78%
Yearly Volatility:
37.36%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.29%
Volatility in last five trading days has been -46.60% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-4.81%
Weekly VaR:
-10.76%
Monthly VaR:
-21.52%
How Much Can the price of
DE
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-17%
Worst case (decline):
-74.56%
This translates to price declining to:
$299.09
This translates to price declining to:
$92.14
Severe Crash Probability
Risk of crash in next 6/12 months: Very high (>70%)
What is Value at Risk (VaR)?
Risk Fundamentals
DE is a 51.92% riskier investment compared to the market/S&P 500 & is 30.15% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -28.43% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
DE
Beta in relation to market/S&P 500--1.06
Expected beta in 1 year's time:
0.74
Expected beta in 3 year's time:
1.047
Unlevered (debt free) Beta:
0.431
Beta in relation to Nasdaq (XNAS):
0.723
Beta in relation to all global stocks::
0.801
Beta Comparison & Analysis
Beta of competitors/peers::
1.047
Beta is 1.49% higher than peers
Average Industry Beta:
1.134
Beta is -6.32% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
30.05%
Sustainable growth rate is 121.32% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.231
Alpha is 128.45% above industry average alpha yield
Alpha is 1470% higher than market/& is unsustainably high
Analysis of Cost of Capital of
DE
Equity cost of capital:
0.104
Equity cost of capital is -4.50% below industry mean WACC
Unlevered (without debt) cost of capital:
4.23%
Before-tax cost of debt:
-
After-tax cost of debt:
-
Overall debt rating:
-
Weighted average cost of capital (WACC):
-
-
Key Per-Share Metrics & Analysis
Revenue per share:
$150.26
Revenue growth rate per share of (3Y):
6.14
Annual revenue growth rate is 141.51% above the industry average
EPS:
$19.17
Expected Annual growth rate of EPS (3Y):
20.62%
Expected future EPS growth rate is 156.02% higher than the Farm & Heavy Construction Machinery industry
Free cash flow (FCF) per share:
$4.32
Balance sheet equity growth per share: 33.62%
Equity growth rate per share is -64.33% lower than the industry
Debt per share
$108.80
EBITDA per share
$31.18
Valuation Analysis Today of
DE
P/E Ratio:
18.09
P/E Ratio of Competitors/Peers:
17.38
P/E ratio is 4.11% higher than main peers & is -29.95% lower than the industry
Stock price/value with industry average P/E ratio: $495.16
DE is -26.85% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $89.60
Present value of the expected future dividends only: $72.49
P/S (Price to Sales ratio):
2.41
Price to sales ratio is 32.10% above the industry mean
P/B (Price to book value ratio):
6.14
Price to free cash flow: 83.87
-
Net income growth rate (3Y):
160.66%
Net income growth rate is 226.18% higher than the average industry net income growth rate
Dividend Analysis
Dividend payout rate: 5.41%
Dividend yeild: 1.18%
Previous Dividend: $1.13
Previous adjusted dividend: $1.13
Previous Dividend: $4.28
Expected next dividend best case: $1.25
Expected next dividend worst case: $1.01
Average dividend payment (long-term): $0.90
Average dividend increase/decrease (growth rate) % per period: 4.27%
Expected next dividend payment date: 11/07/2022
Expected next dividend record date: 28/09/2022
-
Previous dividend payment date: 08/08/2022
Previous dividend record date: 30/06/2022
-
Dividend History:
2022-06-29--$1.13
2021-12-30--$1.05
2021-06-29--$0.90
2022-03-30--$1.05
2021-09-29--$1.05
2021-03-30--$0.90
Dividend growth rate is -93.90% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
184.44%
Net debt to equity ratio:
240.61%
Debt to assets ratio:
41.25%
Net debt to assets ratio:
53.81%
Debt-to-asset ratio is -3.87% below industry average
Ability to repay debt:
Interest coverage ratio:
-
-
Looking forward:
Debt growth rate:
5.48%
Annual debt growth is -99% lower than industry average debt growth rate
Debt repayment rate in last quarter: 4.88%
Analysis of Key Statistics
Correlation of price movement with the market:
0.661
Statistical significance of correlation:
DE has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.555
Stock price is 19.15% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.555
Correlation of price movement with Nasdaq (^IXIC):
0.013
Covariance of price movement with the market:
0.019
Kurtosis
5.863
Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.323
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
DE
Gross Profit Margin Ratio:
116%
Operating Profit Margin Ratio:
16.23%
Operating profit margin is -411.40% lower than the industry
Net Profit Margin Ratio:
116%
Effective Tax Rate:
20.52%
Effective tax rate is -68.17% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
33.43%
Return on equity (ROE) is 128.23% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
7.47%
Return on assets (ROA) is 61.47% higher than the industry
Financial Leverage:
1.7x
Current Ratio:
2.25
Current ratio is -8.35% below industry average
Cash Conversion Cycle (days):
78.9
Cash conversion cycle is 62.96% above industry average
The remaining useful life of property plant & equipment is: 0.4 years
Stock based compensation to net income ratio:
0.44%
In-depth Efficiency Analysis
Revenue generated per employee:
600.3K
Each employee generates 14% more revenue than industry average revenue per employee
EBITDA generated per employee:
124.6K
Each employee generates -293% less EBITDA than industry average revenue per employee
Profit generated per employee:
78.8K
Each employee generates -189% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
0.3K
Each employee generates -90% less free cash flow than industry average revenue per employee
Assets/Capital per employee
304.1K
Each employee generates -90% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
Research & development (R&D) investment growth rate-- -3.47%
Growth rate in R&D investment/expenditure is -103.68% lower than the industry
Competitors/Peer firms of
DE
CATERPILLAR INC. (XNYS:CAT)
GENERAL ELECTRIC COMPANY (XNYS:GE)
THE BOEING COMPANY (XNYS:BA)
LOCKHEED MARTIN CORPORATION (XNYS:LMT)
RAYTHEON TECHNOLOGIES CORPORATION (XNYS:RTX)
Canadian National Railway Company (XNYS:CNI)
HONEYWELL INTERNATIONAL INC. (XNAS:HON)
ILLINOIS TOOL WORKS INC. (XNYS:ITW)
NORFOLK SOUTHERN CORPORATION (XNYS:NSC)
Current Analyst Ratings
Strong buy�17%
Buy�13%
Hold�58%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
5/1/22
Revenue:
45.35B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
32.07B
13.28B
1.70B
932.00M
3.54B
-
683.00M
5.92B
-
-
1.93B
9.41B
7.36B
5.95B
7.47B
1.53B
5.95B
Statement of Cash Flow
Date:
Period:
447.00M
Differed Income Tax :
- 173000.00K
Stock Based Compensation :
26.00M
Change in Working Capital :
- 1251000.00K
Accounts Receivables:
- 1429000.00K
Other Working Capital:
35.00M
Other Non-Cash Items:
- 355000.00K
Net Cash Provided by Operating Activities:
791.00M
Investments in PP&E:
- 766000.00K
Net Acquisitions:
- 449000.00K
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
2/1/22
2022
Q1
4.47B
735.00M
5.21B
43.50B
7.94B
-
56.64B
12.29B
3.19B
1.21B
176.00M
923.00M
5.19B
22.97B
17.26B
79.61B
10.48B
14.47B
-
-
172.00M
25.12B
32.84B
3.29B
36.68B
-
61.81B
-
37.68B
-
-
May 1, 2022 at 6:00:00 AM
37.99B
17.80B
79.61B
911.00M
47.31B
42.8B
-
- 1321000.00K
- 2536000.00K
- 1685000.00K
39.00M
- 603000.00K
- 322000.00K
3.76B
1.19B
- 36000.00K
- 590000.00K
3.98B
4.57B
791.00M
- 766000.00K
25.00M
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
DE
2023
2024
2025
2026
2027
$447.61
$479.56
$513.79
$550.46
$589.75