Deere Outlook - Mixed Signals Amid Volatility and Unclear Momentum

Market Snapshot

Headline takeaway: Deere's technical outlook is weak with more bearish signals (3 vs 1 bullish), and its price has recently declined by 2.49%. Take a cautious approach in the near term.

News Highlights

Recent developments suggest mixed signals for the agricultural machinery sector and broader market:

• May 29, 2025 - Farm machinery industry eyes modest recovery: The Brazilian Agricultural Machinery and Implements Sector Chamber (CSMIA) reports a 12% revenue increase in Q1 2025 compared to the same period in 2024. This could bode well for Deere as a global leader in the space, but demand recovery appears to be slow and uneven.
• May 31, 2025 - China’s factory activity contracts: China’s PMI rose to 49.5 in May from 49.0 in April, still below the 50 threshold for expansion. While this indicates a slight improvement, it highlights ongoing global economic headwinds that could pressure Deere’s international markets.
• May 25, 2025 - Earnings call transcript: Titan Machinery beats Q1 2025 EPS expectations: This suggests that some players in the agricultural equipment sector are managing to outperform in a tough market, but it remains to be seen if Deere can match this trend.

Analyst Views & Fundamentals

Average (simple mean) rating score: 4.00

Weighted rating score (performance-weighted): 2.84

Rating consistency: Analysts are split, with ratings ranging from "Strong Buy" to "Neutral", and "Underperform". The overall dispersion in sentiment indicates uncertainty among experts.

These scores align with the recent price trend, which shows a 2.49% drop over the last five days. Analysts seem to be acknowledging the weak technical signals and mixed fundamentals.

Key Fundamental Values and Model Scores

• Revenue-MV score: 1.00 (internal diagnostic score) — Deere’s revenue is declining (YoY growth rate = -22.42%) and the model gives it a low score.
• Profit-MV score: 3.00 — Profitability is also struggling with a YoY EPS decline of -33.45%.
• EV/EBIT: 73.01 — This is a high valuation multiple, indicating the market is paying a premium for Deere’s cash flow.
• PE ratio: 90.71 — Expensive stock valuation relative to earnings, suggesting investors are optimistic about future growth, though fundamentals are currently lagging.
• CFOA (Cash Flow from Operations) score: 2.00 — Weak cash generation, with a score of 2.00 indicating a bearish view on operational cash flows.
• Cash-UP score: 4.00 — Strong cash position remains a positive, though not enough to offset other weaknesses.

Money-Flow Trends

Big-money investors are selling more than buying, with a block trend of negative and a large-inflow ratio of 0.490 (i.e., slightly more outflows than inflows among large investors). However, small retail investors are showing a positive trend, with 50.4% of inflow ratios positive.

This suggests that institutional investors are losing confidence while retail investors might be buying in hopes of a rebound. The fund-flow score of 7.74 (internal diagnostic score) indicates the model sees these inflows as reasonably positive, but overall sentiment is still bearish.

Key Technical Signals

Deere's technical indicators are overwhelmingly bearish, with 3 out of 4 signals pointing downward:

• WR Oversold (score: 7.65) — Strong bullish signal but not enough to offset the bearish trend.
• Dividend Announcement Date (score: 1.00) — Very bearish as it historically correlates with negative returns (-3.55% average return).
• Bearish Engulfing (score: 2.15) — Strong bearish signal with a historically poor win rate (36.36%).
• Bullish Engulfing (score: 1.42) — Weak positive signal that is outperformed by bearish indicators.

Recent chart patterns include:

• May 3: WR Oversold (bullish signal).
• August 25: Bearish Engulfing pattern.
• August 27: Dividend date + Bullish Engulfing (contradictory signals).
• August 29: WR Oversold again.

Key insights: The technical side is in a volatile and unclear state with bearish signals dominating, and the overall trend suggests caution. A technical score of 3.06 (internal diagnostic score) confirms the weak reading.

Conclusion

Actionable takeaway: Consider waiting for a clearer trend to emerge before initiating new positions in Deere. The stock is currently under pressure from weak fundamentals, bearish technical indicators, and divergent analyst opinions. While retail investors are showing some optimism, big money is pulling back. Watch for upcoming earnings and any signs of stabilization in cash flow or revenue growth to get a clearer read on the near-term outlook.