Buffett Brain · Research note
Score updated 27 Oct 2026 · analysis from 27 Sept 2026
DE· Industrials
Deere &
Deere's high P/E of 34.8 with declining EPS suggests overvaluation, despite strong operating margins in its sector.
Buffett fit
Partial fit
Owner
39
Durability
53
Management
51
Price
7
Score updated 27 Oct 2026 · analysis from 27 Sept 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Industrials stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
Owning Deere would involve navigating declining revenue and EPS, with a 5-year EPS CAGR of -7.37%.
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Deere's durability is challenged by its reliance on cyclical agricultural markets, evidenced by a 5-year revenue CAGR of -4.5%.
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Deere has been buying back shares, with a 5-year share count CAGR of -3.92%, indicating shareholder-friendly practices.
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Deere's earnings yield of 2.88% and yield of 1.85% are well below the 8-10% target for a fair entry.
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- The full reasoning behind all four pillars
- The 5-year price target and the return it implies
- What would change the call
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
5- 1 of 18.84% is top-quintile within its sector.
- 2Share count has decreased with a 5-year CAGR of -3.92%, indicating .
- 3Current ratio of 2.31 suggests good short-term liquidity.
- 4Dividend yield of 1.2% with a 5-year CAGR of 13.4% shows commitment to returning capital.
Concerns
5- 1 of 34.8 suggests overvaluation given the 5-year EPS CAGR of -7.37%.
- 2Net debt/EBITDA of 4.80 indicates high risk.
- 3Interest coverage of 3.0 is below the 5x comfortable threshold.
- 45-year revenue CAGR of -4.5% points to declining top-line growth.
Price history
$640+86.8%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Deere & Company manufactures and distributes equipment through four segments, including Production and Precision Agriculture. The company generated $44.67B in revenue with a net income of $5.03B. Its of 18.84% is top-quintile within its sector. However, revenue has declined with a 5-year CAGR of -4.5%, indicating potential challenges in growth.
How this analysis has moved
The call has held across 5 reviews.
Oct 4, 2026 → Oct 27, 2026
What other investors would say
The same company, judged by three other documented playbooks.
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