Deere Outlook: A Challenging Technical Picture Amid Mixed Fundamentals

Market Snapshot

Deere (DE.N) is facing a bearish technical outlook with mixed fundamentals and volatile market conditions. With a technical score of 3.1 and a fund-flow score of 7.9, the stock is at a crossroads between negative momentum and positive money flows.

News Highlights

Recent headlines reflect a broader trend of trade uncertainty and economic shifts. Below are the most relevant stories for Deere: Trump doubles steel tariffs to 50% (multiple articles): This move could affect Deere’s industrial and agricultural equipment sectors, as increased costs may impact demand. Tariff hikes often benefit domestic producers in the short term but may lead to higher costs and reduced global competitiveness. China’s manufacturing activity contracts (May 30): Global demand for heavy machinery could be under pressure as China, a major market for Deere, reports a slowdown in production. This could weigh on Deere’s future revenue forecasts. Uranium mining news in Utah (May 31): While not directly related to Deere, this signals a broader policy shift under the Trump administration toward resource industries, which might indirectly influence infrastructure spending and related sectors.

Analyst Views & Fundamentals

Analyst ratings are mixed, with only one recent "Buy" recommendation from Wells Fargo's Jerry Revich. The simple average rating is 4.00, but the performance-weighted rating is 0.00 due to the analyst's zero percent historical win rate and a negative average return of -1.34% for the period.

Key fundamental factors and their model scores: Price-to-Book (PB): 10.53 (score: 3) – Indicates overvaluation by this metric. Price-to-Cash Flow (PCF): 35.83 (score: 1) – Suggests poor cash flow efficiency. Price-to-Earnings (PE): 97.64 (score: 2) – Reflects high valuation relative to earnings. EV/EBIT: 25.63 (score: 3) – Shows a moderate enterprise value relative to earnings before interest and taxes. Net Income to Revenue: 18.50% (score: 0) – Indicates weak profitability as a percentage of revenue.

There is a notable disconnect between the negative analyst signal (underperform recommendation) and the recent price trend of -0.75%. These mixed signals suggest caution for investors.

Money-Flow Trends

Big-money and institutional flows remain cautiously optimistic for Deere. The overall inflow ratio stands at 50.10%, with large and extra-large investors showing inflows of 50.81% and 49.62%, respectively. However, the extra-large trend is negative. Retail investors also are showing positive momentum, with a 51.29% inflow ratio. This contrast suggests institutional confidence but mixed sentiment among smaller traders.

Key Technical Signals

Technically, Deere is in a weak position with three bearish indicators overpowering one bullish signal. The technical score of 3.1 reflects this imbalance. Here are the key signals: WR Overbought: Internal diagnostic score: 1.00 (Biased bearish) RSI Overbought: Internal diagnostic score: 1.71 (Neutral bias) WR Oversold: Internal diagnostic score: 7.67 (Bullish bias) Bearish Engulfing: Internal diagnostic score: 2.03 (Biased bearish)

Recent chart patterns include the WR Overbought signal on May 21 and 25, as well as the RSI Overbought signal on May 25, and a rare WR Oversold signal on May 26. These mixed signals highlight the volatile nature of the stock’s recent price action.

Conclusion

With a weak technical outlook, mixed fundamentals, and a volatile market backdrop, Deere appears best suited for a cautious approach. Investors should consider waiting for a clearer trend to emerge, particularly if the stock pulls back from current levels. Given the recent bearish signals and underperforming analyst rating, it may be wise to avoid new long positions for now and monitor key earnings or industry developments for a potential catalyst.