Deere & Company (DE) Stock Valuation — DCF Analysis
Agricultural - Machinery · NYSE
Current Price
$577.48
Intrinsic Value
Outside reliable range
COMPETITIVE MOAT
↑Brand Loyalty & Dealer Network
Deere's strong brand recognition and extensive dealer network create significant switching costs for farmers. This established infrastructure provides crucial support and service, fostering deep customer loyalty.
↑Technological Innovation & Data
Investments in precision agriculture and autonomous solutions differentiate Deere. The company's growing data insights offer farmers efficiency gains, creating a technological moat.
↑Economies of Scale
As a leading manufacturer, Deere benefits from significant economies of scale in production. This allows for cost advantages over smaller competitors, enhancing pricing power.
INVESTMENT RISKS
↓Commodity Price Volatility
Fluctuations in agricultural commodity prices directly impact farmer income and their ability to invest in new equipment. This cyclicality poses a significant revenue risk for Deere.
↓Regulatory & Trade Policy Shifts
Changes in trade policies, like potential tariff adjustments on imported equipment, can alter competitive dynamics and impact Deere's global sales and profitability.
↓Competition & Disruption
Emerging technologies and new entrants could challenge Deere's market position. The rapid pace of innovation requires continuous investment to maintain its competitive edge.
Base case
DE base case valuation
Base case assumptions: -4.9% annual growth, 10.0% discount rate, 30x exit multiple, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the DE valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Deere & Company respond.
Open DCF Calculator for DECompany Overview
Deere & Company is a global manufacturer and distributor of a wide range of equipment. The company's operations are organized into four primary business segments: Production and Precision Agriculture, Small Agriculture and Turf, Construction and Forestry, and Financial Services. The Production and Precision Agriculture segment focuses on large-scale farming and advanced agricultural practices, offering medium-sized tractors, various harvesting machinery (including combines, cotton pickers, and sugarcane harvesters), front-end harvesting tools, sugarcane loaders, pull-behind scrapers, and essential tillage and seeding implements. It also supplies specialized application equipment like sprayers and nutrient management systems, along with soil preparation machinery, primarily serving grain growers. The Small Agriculture and Turf segment caters to smaller farming needs and land maintenance. Its product line includes utility tractors along with their complementary loaders and attachments. This segment also provides an extensive selection of turf and utility equipment, suchg as riding and commercial lawnmowers, specialized golf course maintenance machinery, and utility vehicles. Additionally, it offers various implements for tasks like mowing, tilling, snow removal, aerating, and general turf care across residential, commercial, golf, and sports environments, alongside other outdoor power products and hay and forage equipment. This division also resells products from other manufacturers. Its customer base includes dairy and livestock farmers, other crop producers, and general turf and utility clients. The Construction and Forestry segment delivers a comprehensive suite of heavy machinery for construction and logging. This includes earthmoving and roadbuilding equipment such as backhoe loaders, crawler dozers and loaders, four-wheel-drive loaders, excavators, motor graders, articulated dump trucks, landscape and skid-steer loaders, milling machines, pavers, compactors, rollers, crushers, screens, and asphalt plants. For forestry operations, it supplies log skidders, feller bunchers, log loaders and forwarders, and log harvesters, in addition to various attachments for all its machinery. Lastly, the Financial Services segment provides funding solutions to facilitate the sale and leasing of agriculture and turf, as well as construction and forestry equipment. It extends wholesale financing to dealers stocking these product lines, offers extended equipment warranties, and manages retail revolving charge accounts for end-users. Established in 1837, Deere & Company has its corporate headquarters situated in Moline, Illinois.
Financial Metrics — DE Stock Valuation Data
Revenue/Share (TTM)
$173.48
FCF/Share (TTM)
$13.95
ROIC (TTM)
7.1%
ROE (TTM)
18.3%
P/FCF
41.4x
EV/EBITDA
19.5x
FCF Yield
2.42%
Debt/Equity
2.33x
Based on trailing twelve-month data, DE shows a free cash flow per share of $13.95 and a ROIC of 7.1%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 41.4x and FCF yield of 2.42% are important context metrics when evaluating DE's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of DE?
Deere & Company currently generates $13.95 in free cash flow per share. At the current price of $577.48, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is DE undervalued?
DE trades at a P/FCF ratio of 41.4x with a free cash flow yield of 2.42%. This elevated P/FCF suggests the market is pricing in significant future growth. However, whether DE is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value DE stock using DCF?
To perform a DCF valuation on Deere & Company: (1) Start with the trailing free cash flow per share ($13.95) as the base, (2) project future FCF growth over 5-10 years based on Agricultural - Machinery industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting DE's risk profile — with a debt-to-equity of 2.33x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to DE?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Deere & Company, this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Agricultural - Machinery trends, then discounting those amounts to today's dollars. DE's ROIC of 7.1% suggests the company may face challenges generating returns above its cost of capital.
How does WACC affect DE stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For DE, with a debt-to-equity ratio of 2.33x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 19.5x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See DE PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Industrials valuationsDCF and P/E value DE with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.