Stock Analysis | Deere Outlook - Technical Weakness and Mixed Analyst Signals Spell Uncertainty

Market Snapshot

Headline Takeaway: Deere's stock is down -4.58% in recent trading, with technical indicators and analyst ratings showing mixed signals. The stock is currently not favored by technical models and shows uneven analyst consensus.

News Highlights

1. Farm Machinery Industry Eyes Modest Recovery (May 29, 2025)

The Brazilian Agricultural Machinery Sector Chamber reported that sales of farm equipment stabilized in late 2024. This hints at a potential slow turnaround in demand for Deere’s products in key agricultural markets, though it remains too early to assess its direct impact on DE stock performance.

2. Trump Fast-Tracks Utah Uranium Mine (May 31, 2025)

President Trump’s decision to fast-track a uranium mine in Utah is unlikely to directly affect Deere, but it reflects broader policy shifts that could impact resource extraction sectors. Deere's machinery is used in mining, so any industry expansion might eventually boost demand for its products.

3. Titan Machinery Beats Q1 Earnings (May 22, 2025)

Titan Machinery, a smaller farm equipment player, beat Q1 2025 earnings expectations. While it’s not a direct competitor, such results could signal a gradual recovery in the equipment market, which might eventually benefit Deere. However, Deere’s own earnings performance has been mixed in recent quarters.

Analyst Views & Fundamentals

Analysts remain divided on Deere. The simple average rating is 4.00 (Neutral), while the performance-weighted rating is 2.84, favoring more bearish assessments due to historical returns.

• Consistency: Analysts are not in agreement—ratings range from “Strong Buy” to “Buy” and “Neutral,” with no clear consensus.
• Alignment with Price Trend: The current price trend (-4.58% fall) appears to match the bearish tilt of the historical-weighted expectations.

Key Fundamentals:

• Revenue-MV: 0.217 (internal diagnostic score: 1/10) – Suggests weak revenue momentum.
• EV/EBIT: 73.01 (score: 2/10) – High valuation relative to earnings.
• Profit-MV: -14.08% (score: 3/10) – Negative profitability trend.
• PE: 90.71 (score: 2/10) – Elevated price-to-earnings ratio.
• ROA: 1.69% (score: 1/10) – Weak return on assets.
• Basic EPS YoY Growth: -33.45% (score: 3/10) – Sharp decline in earnings per share.
• Long-Term Debt to WC Ratio: 0.94% (score: 2/10) – Low leverage, but not enough to offset other weaknesses.
• CFOA: 1.60% (score: 2/10) – Weak operating cash flow.
• Asset-MV: 0.272 (score: 1/10) – Assets underperforming market.
• Cash-MV: -24.22% (score: 3/10) – Negative cash flow trend.

Money-Flow Trends

Big-money investors are showing a negative trend in flows, with large and extra-large investors pulling back. In contrast, small retail investors remain slightly positive, with a Small_inflow_ratio of 0.5029. However, the overall trend is still bearish, with a fund_flow_score of 7.71 (internal diagnostic score) and an overall_inflow_ratio of 0.4865. This suggests that institutional money is likely withdrawing, while retail activity is insufficient to offset the larger sell-off.

Key Technical Signals

Deere's technical indicators are mostly bearish, with the technical score at 3.02 (internal diagnostic score). The analysis notes a weak technical side with more bearish than bullish signals (3 bearish vs 1 bullish). Key indicators include:

• WR Oversold (7.5): A bullish bias is present, suggesting oversold conditions may offer a potential rebound. However, it's one of only a few positive signals.
• Bearish Engulfing (2.15): Strong bearish signal, with historical returns trending downward.
• Dividend Announcement Date (1.0): Historically linked to price drops, with a 0% win rate and -3.55% average return—very bearish.
• Bullish Engulfing (1.42): Despite the name, this indicator shows a bearish bias in Deere’s case.

Recent Chart Patterns (Last 5 Days):

• 2025-09-03: WR Oversold
• 2025-08-25: Bearish Engulfing
• 2025-08-27: Dividend Announcement Date + Bullish Engulfing
• 2025-08-29: WR Oversold
• 2025-08-20: Bullish Engulfing

Key Insight: The market is in a volatile state with unclear direction, and bearish signals dominate the technical landscape.

Conclusion

Deere is currently in a weak technical position, with bearish signals outweighing any bullish ones. Analysts are also split, with mixed fundamental signals and a recent price drop aligning with bearish expectations. While retail investors remain slightly optimistic, institutional investors are pulling back.

Actionable Takeaway: Investors may want to consider waiting for a clearer trend to emerge or monitor upcoming earnings and cash flow developments before taking a position. For now, caution is warranted given the negative technical score (3.02) and mixed analyst guidance.