Stock Analysis | Deere Outlook - Cautious Technicals, Mixed Analysts, and Positive Fund Flows

Market Snapshot

Takeaway: Deere’s technical outlook is weak, but positive cash flow and mixed analyst ratings suggest a watchful approach. Despite recent price gains of 2.97%, internal diagnostic scores (0-10) show a technical score of 4.73, signaling a cautious stance. Meanwhile, strong inflow ratios and mixed analyst sentiment paint a complex picture for the agricultural equipment giant.

News Highlights

• Agri Machinery Recovery Signs in Brazil - Sales of agricultural machinery in Brazil stabilized in late 2024, rising 12% year-over-year from November 2024 to February 2025. This could bode well for Deere’s international operations, especially as the global farm equipment market rebounds.
• India's Food Processing Challenge - Officials highlight the need for indigenous food processing machinery in India, pointing out continued dependence on imports. Deere’s potential expansion into this sector could open new revenue streams, though it’s not yet clear how quickly this will materialize.
• U.S. Visa Policy Changes - New U.S. visa restrictions for Chinese students could affect international demand for U.S. agricultural education programs, indirectly impacting Deere’s long-term market in China. However, the direct financial impact remains limited for now.

Analyst Views & Fundamentals

Analyst Consensus: Recent ratings show a mixed picture. The simple average rating is 4.25, while the performance-weighted average is 3.94. Analysts range from "Strong Buy" to "Neutral," with no strong consensus on direction, and recent price trends show a rise of 2.97%, aligning with the market's relatively neutral expectations.

Key Fundamental Drivers: Deere’s fundamentals show some strength, earning an internal diagnostic score of 7.44. Key figures include:

• Operating cash flow per share (YoY): -5.56% (score: 2.00)
• Net income to revenue ratio: 51.17% (score: 3.00)
• Basic EPS growth (YoY): -33.45% (score: 2.00)
• Operating cash flow growth (YoY): -39.83% (score: 3.00)
• Net profit growth (YoY): -35.14% (score: 3.00)
• Asset to market value ratio: 27.09% (score: 3.00)

While revenue and asset metrics show some strength, earnings and cash flow indicators lag, suggesting mixed performance. Investors should keep a close eye on future earnings and operating cash flow trends for signs of improvement.

Money-Flow Trends

Deere is experiencing mixed money flow dynamics with a fund flow score of 7.83, categorized as “good.” While small investors are showing a positive trend, larger institutional blocks are trending negatively. Specific inflow ratios show:

• Small investor inflow ratio: 50.64%
• Large investor inflow ratio: 50.70%
• Block inflow ratio: 49.96%

This suggests that while retail investors are optimistic, large players remain cautious or neutral. The overall inflow ratio of 49.96% implies a slight net outflow from major institutional blocks, which could signal caution or profit-taking in the near term.

Key Technical Signals

Deere’s technical analysis shows mixed signals, with an overall trend score of 4.73, labeled as “Weak technology, need to be cautious.” Here’s a breakdown of key indicators and internal diagnostic scores (0-10):

• WR Oversold: 7.77 (Bullish bias)
• Earnings Release Date: 8.13 (Strong bullish)
• MACD Death Cross: 2.14 (Neutral bias)
• Bearish Engulfing: 3.67 (Neutral rise)

On August 14, the stock saw a mix of signals including a MACD Death Cross and WR Oversold, alongside an earnings release. A Bullish Engulfing pattern appeared on August 15, while a Bearish Engulfing pattern was noted on August 25, indicating conflicting price actions.

According to key insights from the technical analysis: “Technical indicators show that the market is in a volatile state, and the direction is not clear enough. Long/short signals are relatively balanced, and it is suggested to pay close attention to market changes.”

Conclusion

Deere is at a crossroads, with mixed signals from both technical and fundamental analyses. While cash flow and asset metrics suggest some resilience, earnings and operating cash flow remain weak. Analysts are split, and money flows show retail optimism but institutional caution. With a bullish earnings release and WR oversold condition, it might be worth watching the next earnings report and potential follow-up patterns for clearer direction. For now, consider waiting for a clearer trend before making large moves.