Can Deere sustain its operating income growth post-2023?

**Deere's ability to sustain its operating income growth post-2023 is uncertain**. Here's why:

1. **Recent Performance**: Deere's operating income has experienced a significant decline, with a year-over-year drop of 59.59% for Q1 2025, compared to the previous year. This indicates a challenging period for the company.

|code|Ticker|Name|Date|Operating Income YoY|Total Revenue YoY|market_code|
|---|---|---|---|---|---|---|
|DE|DE.N|Deere|2024 Q2|-18.996881496881496|-12.377063323172486|169|
|DE|DE.N|Deere|2024 Q3|-34.69217970049917|-16.764761723941525|169|
|DE|DE.N|Deere|2024 Q4|-50.60201757240481|-27.699195432130807|169|
|DE|DE.N|Deere|2025 Q1|-59.59367945823928|-30.17644645055396|169|

2. **Market Conditions**: The company's performance is likely influenced by broader market conditions, including trade tensions and macroeconomic factors. For instance, the imposition of tariffs on agricultural products by China could affect Deere's sales and profitability.
3. **Financial Metrics**: Despite the decline in operating income, Deere has maintained a strong net margin of 10.19% and an operating margin of 10.52% as of December 31, 2024. These margins suggest that the company is still profitable, but whether these margins can be sustained in a fluctuating market environment is uncertain.

|code|Ticker|Name|Date|Operating Profit Margin|Total Revenue|Net Profit Margin|market_code|
|---|---|---|---|---|---|---|---|
|DE|DE.N|Deere|2024 Q2|19.449307075127646|1.5235E10|15.0109|169|
|DE|DE.N|Deere|2024 Q3||1.3152E10|14.409|169|
|DE|DE.N|Deere|2024 Q4|17.801067367932554|1.1143E10|13.7056|169|
|DE|DE.N|Deere|2025 Q1|10.519511048425013|8.508E9|10.1904|169|

4. **Analyst Sentiments**: Analysts have revised their earnings estimates downward, indicating a pessimistic outlook for Deere's near-term performance. The consensus EPS estimate for Q1 2025 is $5.74, which represents a 32.71% decline from the previous year. This suggests that the company may face continued pressure on its operating income in the short term.
5. **Strategic Position**: Deere's strategic initiatives, such as product and parts financing services, could provide a cushion during downturns. However, the effectiveness of these strategies in sustaining growth post-2023 remains to be seen.

In conclusion, while Deere has shown resilience in maintaining profitability margins, the sustainability of its operating income growth beyond 2023 is uncertain due to a combination of internal challenges and external market factors. The company's ability to adapt to these challenges and capitalize on potential opportunities will be crucial in determining its future financial performance.