Deere Outlook - Mixed Signals Amid Technical Weakness and Volatile Momentum

Market Snapshot

Takeaway: Deere's technical indicators are weak, suggesting caution for now. The stock is currently down 1.31%, with technical analysis favoring a bearish stance and market sentiment remaining neutral overall.

News Highlights

• Farm machinery industry eyes modest recovery: The Brazilian Agricultural Machinery and Implements Sector Chamber (CSMIA) reported a 12% revenue increase between November 2024 and February 2025, signaling potential stabilization in the agricultural equipment sector, which could benefit Deere in the long run.
• Earnings call highlights demand-stimulating efforts: Titan Machinery's Q1 2025 earnings call suggested OEM partners are planning initiatives to boost demand in the second half of the year. While not directly related to Deere, this hints at a broader industry trend that could impact Deere's market if sustained.
• China's factory activity shows slight improvement: The PMI index rose from 49.0 in April to 49.5 in May, indicating a slow recovery in China's manufacturing sector. Deere, with exposure to global agricultural and construction markets, may see indirect benefits from increased industrial activity.

Analyst Views & Fundamentals

Deere's recent analyst ratings are split, with a simple average rating score of 4.00 and a performance-weighted score of 2.84. This disparity reflects a lack of consensus among analysts—three different ratings of "Strong Buy," "Buy," and "Neutral" were reported in the past 20 days.

Notably, JPMorgan analyst Tami Zakaria, with an 83.3% historical win rate, issued a "Neutral" rating, while Baird's Mircea Dobre (100% win rate) also gave a "Neutral." On the other hand, DA Davidson's Michael Shlisky (0.0% win rate) and Truist's Jamie Cook (33.3% win rate) both leaned "Strong Buy," despite poor historical performance.

Fundamental Factors and Scores

• Revenue-MV: Score: 2.00 – Revenue growth is below average.
• Total operating revenue (YoY growth rate %): Score: 2.00 – -22.42% growth, a weak sign for recent performance.
• EV/EBIT: Score: 3.00 – 73.01x ratio, indicating higher valuation relative to earnings.
• Profit-MV: Score: 3.00 – Negative net income, with a value of -0.14.
• PE: Score: 2.00 – 90.71x, a high multiple that may suggest overvaluation.
• Net cash flow from operating activities (YoY growth rate %): Score: 3.00 – -39.83% decline in operating cash flow, a major concern.
• Cash-UP: Score: 3.00 – Positive cash ratio of 0.24.
• CFOA: Score: 1.00 – A positive 1.60% in operating cash flow, but the lowest score here.
• Operating revenue (YoY growth rate %): Score: 2.00 – -22.56% YoY growth, aligning with total revenue weakness.
• Asset-MV: Score: 2.00 – 0.27 assets per dollar of market value, a moderate ratio.

Money-Flow Trends

Big-money investors appear to be cautious, with a negative overall trend and an overall inflow ratio of 0.4855. Large and extra-large fund flows are also negative, with inflow ratios of 0.4891 and 0.4817, respectively. This contrasts with retail flows, where small investors are showing a positive trend with an inflow ratio of 0.5032. The overall fund-flow score of 7.73 is considered "good," suggesting inflow activity may be stabilizing.

Key Technical Signals

• WR Oversold (Weeks’ Range Oversold): Internal diagnostic score: 7.5 – A bullish signal, indicating potential for a rebound after extreme overselling.
• Dividend Announcement Date: Internal diagnostic score: 1.0 – A bearish signal, often linked to price declines after ex-dividend dates.
• Bearish Engulfing: Internal diagnostic score: 2.15 – A bearish candlestick pattern, suggesting a potential downtrend.
• Bullish Engulfing: Internal diagnostic score: 1.42 – Despite the name, this pattern has historically shown bearish tendencies in recent data.

Key insights from the technical analysis indicate 3 bearish signals vs. 1 bullish signal, resulting in an overall trend of "weak" with a recommendation to avoid the stock. Recent chart patterns on 2025-09-03, 2025-08-25, and 2025-08-27 highlight volatile market conditions and unclear direction.

Conclusion

Deere is caught in a crossfire between bearish technical signals and mixed analyst sentiment. The internal diagnostic score of 3.02 reinforces the idea that this is a weak technical setup, with more bearish indicators than bullish ones. While the fundamentals remain mixed—highlighting both moderate cash flow and significant revenue declines—big-money flows remain cautious. Investors should consider waiting for clearer momentum or a pullback before initiating new positions.