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Bernstein SocGen Group maintained its Market Perform rating and $548.00 price target on Deere (NYSE:DE) Monday following analyst meetings with company management in Brazil. Currently trading at $523.12 with a market capitalization of $141.7 billion, Deere appears slightly overvalued according to InvestingPro’s Fair Value analysis.
The research firm projects Brazil could significantly boost Deere’s financial performance, with the potential for the company’s large agriculture revenues in the country to grow by two to three times over the next five to ten years. This expansion could increase total company earnings by 15-20% across business cycles if all strategic initiatives succeed. InvestingPro data shows Deere maintains strong financial health with a GOOD overall score, while demonstrating commitment to shareholders through 55 consecutive years of dividend payments.
Bernstein cited Deere’s 25-year history of local investment in Brazil as a competitive advantage, including recent commitments of $25 million for a research and development center and $100 million to expand its Catalão factory. These investments, along with a strong dealer network and improved localized product offerings, have helped Deere gain significant market share in Brazil over the past 15 years. The company’s strategic focus comes as analysts forecast a 26% revenue decline for the current fiscal year, according to InvestingPro data, making geographic expansion crucial for future growth.
The firm believes Deere is better positioned than competitor AGCO (NYSE:AGCO), which Bernstein also rates as Market Perform with a $99 price target, to capitalize on growth opportunities in the Brazilian agricultural equipment market.
Bernstein estimates Brazil operations could ultimately contribute 15-20% to Deere’s cross-cycle earnings per share and provide approximately 10-15% accretion to the company’s share value.
In other recent news, Deere continues to attract attention from analysts with varied assessments of its growth prospects. Truist Securities maintained a Buy rating with a $619 price target, highlighting the company’s strategic investments in Brazil as a significant growth opportunity. Deere’s efforts in Brazil have led to improved profitability and a strong market position, comparable to its North American operations. Similarly, UBS maintained a neutral rating with a $545 price target, acknowledging the company’s valuable investments in Brazil, though noting potential global market implications if grain demand lags. Meanwhile, Melius upgraded Deere to a Buy, setting a $750 price target, citing confidence in Deere’s leadership in agricultural technology and its potential for recurring revenue growth.
Freedom Broker also adjusted its rating, moving from sell to hold, with a new price target of $484, following Deere’s second-quarter financial results for fiscal year 2025, which showed declines across key metrics. Despite these declines, Deere’s earnings per share surpassed expectations due to operational discipline, though the company has lowered its profit forecast amid ongoing challenges. Additionally, Bernstein SocGen Group reiterated a Market Perform rating, emphasizing Deere’s potential for above-market growth in Brazil, driven by increased connected machinery and favorable domestic policies. These recent developments reflect a mix of optimism and caution among analysts regarding Deere’s future performance in the agricultural sector.
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