Gold prices bounce off 3-week lows; demand likely longer term
On Friday, analysts at Melius upgraded their rating on Deere stock (NYSE: NYSE:DE) from Hold to Buy. The firm set a new price target of $750, significantly above the current analyst range of $434-$619, reflecting confidence in the company’s potential for growth in agricultural technology. With a market capitalization of $138.32 billion, InvestingPro analysis indicates Deere is currently trading above its Fair Value.
The analysts noted their return to a Buy rating after a period on the sidelines, highlighting Deere’s strong position in the ag tech sector. They believe this leadership will bring significant value to farmers and benefit Deere financially. The company has demonstrated its financial strength with $45.38 billion in revenue and has maintained dividend payments for 55 consecutive years.
Melius analysts foresee a cyclical recovery and expect the market to recognize Deere’s strategic advantages. They anticipate that investors will begin to value the company’s recurring revenue potential over the next couple of years.
According to Melius, Deere aims for recurring, SaaS-like revenue to reach 10% of its sales, potentially amounting to $5 billion by 2030. The analysts see a substantial growth opportunity beyond this target.
In other recent news, Deere & Company reported its second-quarter financial results for fiscal year 2025, surpassing earnings per share (EPS) expectations despite overall declines in key metrics. However, the company has lowered its profit forecast due to challenges such as tariffs and high dealer inventory levels. In response to these results, Freedom Broker upgraded Deere’s stock rating from sell to hold, raising the price target to $484. Meanwhile, Citi increased its price target for Deere to $550, maintaining a Neutral rating and adjusting its 2025 EPS estimate upwards. BMO Capital also revised its price target to $460, citing slightly adjusted earnings forecasts for the coming years.
Additionally, John Deere announced the acquisition of Sentera, a company specializing in remote imagery solutions for agriculture. This acquisition aims to enhance Deere’s technological offerings, providing farmers with advanced tools to improve efficiency and sustainability. The integration of Sentera’s technology is expected to complement Deere’s existing precision agriculture technologies. Despite the acquisition, Sentera will continue to supply its products to various users, while Deere’s Operations Center will remain open to other drone imagery providers. These developments reflect Deere’s ongoing commitment to innovation and adaptation in the agricultural sector.
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