Group 1: Stock Performance - Deere's stock increased by 1.94% to $519.20, outperforming the S&P 500's daily gain of 0.28% [1] - Over the past month, Deere's shares declined by 2.21%, underperforming the Industrial Products sector's gain of 5.67% and the S&P 500's gain of 4.37% [1] Group 2: Earnings Projections - Deere is projected to report earnings of $4.6 per share, reflecting a year-over-year decline of 26.87% [2] - Revenue is expected to be $10.21 billion, indicating a 10.32% drop compared to the same quarter last year [2] Group 3: Fiscal Year Estimates - For the fiscal year, earnings are estimated at $18.82 per share and revenue at $38.05 billion, representing declines of 26.54% and 14.99% respectively from the previous year [3] - Recent changes in analyst estimates may indicate evolving short-term business trends, with positive revisions suggesting a favorable outlook on business health and profitability [3] Group 4: Zacks Rank and Valuation - Deere currently holds a Zacks Rank of 3 (Hold), with the consensus EPS estimate remaining stagnant over the past month [5] - The Forward P/E ratio for Deere is 27.06, which is higher than the industry average of 21.81, indicating that Deere is trading at a premium [6] Group 5: PEG Ratio and Industry Ranking - Deere has a PEG ratio of 3.23, which is in line with the average PEG ratio of the Manufacturing - Farm Equipment industry [7] - The Manufacturing - Farm Equipment industry is ranked 174 in the Zacks Industry Rank, placing it in the bottom 30% of over 250 industries [7][8]

Core Insights - Deere & Company (DE) is currently trading at a forward 12-month earnings multiple of 24.46X, which is a 7% premium to the farm equipment manufacturing industry's average of 22.85X and significantly higher than DE's five-year median of 15.83X, resulting in a Value Score of D [1] Financial Performance - DE stock has gained 20.3% year to date, outperforming the industry's growth of 18.3%, while the broader Zacks Industrial Products sector has declined by 2.2% and the S&P 500 has increased by 1.2% [3] - The company expects net income for FY25 to be between $4.75 billion and $5.5 billion, a decrease from $7.1 billion in FY24, due to weak demand across all segments [6][14] - Year-over-year declines in revenues and earnings have been observed for the past six quarters, attributed to lower shipment volumes amid weak demand, although pricing strategies have somewhat mitigated the impact [8] Market Conditions - Farmer spending has been muted due to low commodity prices, persistent inflation, and high interest rates, which are negatively impacting demand for agricultural equipment [9] - DE anticipates a decline in net sales for Production & Precision Agriculture by 15-20%, Small Agriculture & Turf by 10-15%, and Construction & Forestry by 10-15% in FY25 [13] Long-term Prospects - Despite near-term challenges, DE's focus on technology and global demand trends supports long-term growth potential, with the U.S. agricultural machinery market expected to reach $42 billion in 2025 and grow at a compound annual growth rate of 6.3% to around $57.1 billion by 2030 [16] - The company has been investing in advanced technologies and recently acquired Sentera to enhance its offerings in data-driven agricultural solutions [18] Competitive Position - DE's trailing 12-month return on equity is 24.4%, outperforming the industry's average of 19.2%, indicating effective utilization of shareholders' funds [19] - Compared to key competitors, AGCO and CNH Industrial have ROEs of 10.6% and 14.32%, respectively, while Komatsu has 13.56%, positioning DE favorably within the industry [20]

Financial Data and Key Metrics Changes - Total revenue for the first quarter was $594.3 million, down from $628.7 million in the prior year, reflecting a 5.5% decrease in same-store sales [18] - Gross profit decreased to $90.9 million from $121.8 million, with a gross profit margin of 15.3% [18] - Net loss for the quarter was $13.2 million, or $0.58 per diluted share, compared to a net income of $9.4 million, or $0.41 per diluted share in the previous year [20] Business Line Data and Key Metrics Changes - Agriculture segment revenue decreased by 14.1% to $384.4 million, with a pretax loss of $12.8 million compared to pretax income of $13 million in the prior year [20] - Construction segment saw a slight increase in same-store sales by 0.9% to $72.1 million, but reported a pretax loss of $4.2 million compared to a pretax income of $0.3 million last year [21] - European segment revenue increased by 44.2% to $93.9 million, with a pretax income of $4.7 million compared to $1.4 million in the prior year [21] - Australia segment same-store sales decreased by 1% to $44 million, with a pretax loss of $0.6 million compared to a loss of $0.5 million last year [22] Market Data and Key Metrics Changes - Domestic agriculture market remains subdued, with farmers in a wait-and-see mode influenced by commodity prices and government aid [11][12] - European market, particularly Romania, benefited from EU stimulus funds, leading to increased buying activity [14] - Australian market conditions are similar to the domestic agriculture segment, with lower new order activity due to dry conditions and low commodity prices [15][16] Company Strategy and Development Direction - The company is focused on optimizing inventory and managing through the current market cycle, with a target of reducing equipment inventory by $100 million [24][25] - The customer care initiative is emphasized, with parts and service expected to contribute significantly to revenue and gross profit [10] - The company anticipates a challenging back half of the year but remains committed to disciplined execution and improving inventory health [16][29] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing headwinds in the agricultural sector, with weak farmer profitability and uncertain government support impacting demand [9][10] - The construction segment shows more stability compared to agriculture, with contractors starting to fill their project backlogs [38][40] - Management expressed cautious optimism regarding the agricultural sector, citing recent government payments and favorable weather conditions as potential stabilizers [34][35] Other Important Information - The company closed on an acquisition of two stores to expand its presence in Eastern South Dakota [13] - The adjusted debt to tangible net worth ratio was 1.8, well below the bank covenant of 3.5 times [23] Q&A Session Summary Question: Is there any positive outlook on the agricultural sector? - Management indicated that some government payments have started to come through, providing stability, but overall conditions remain challenging [34] Question: How is the construction sector performing amid macro uncertainties? - Management noted that while the construction environment is cautious, there is more positivity compared to agriculture, with contractors seeing improved backlogs [38][40] Question: What programs is the USDA looking to implement for additional support? - Management explained that USDA programs are focused on natural disaster relief and specific allocations to support the agricultural industry [46][48] Question: Are inventories expected to remain flattish in Europe? - Management confirmed that inventory levels in Europe are expected to remain stable, with a focus on reducing aged inventory in North America [58][60] Question: What is the outlook for same-store sales in agriculture for Q2? - Management expects same-store sales in agriculture to be down approximately 30% year-over-year for Q2, with a challenging back half of the year anticipated [75][76]

Financial Data and Key Metrics Changes - Total revenue for Q1 fiscal 2026 was $594.3 million, a decrease of 5.5% from $628.7 million in the prior year period [17] - Gross profit decreased to $90.9 million from $121.8 million, with a gross profit margin of 15.3% [17] - Net loss for Q1 was $13.2 million, or $0.58 per diluted share, compared to net income of $9.4 million, or $0.41 per diluted share in the previous year [19] Business Line Data and Key Metrics Changes - Agriculture segment revenue decreased by 14.1% to $384.4 million, with a pretax loss of $12.8 million compared to pretax income of $13 million in the prior year [19] - Construction segment saw a slight increase in same store sales by 0.9% to $72.1 million, but reported a pretax loss of $4.2 million compared to pretax income of $0.3 million last year [20] - European segment revenue increased by 44.2% to $93.9 million, with a pretax income of $4.7 million compared to $1.4 million in the prior year [20] - Australia segment revenue decreased by 1% to $44 million, with a pretax loss of $0.6 million compared to a loss of $0.5 million last year [21] Market Data and Key Metrics Changes - Domestic agriculture market remains subdued, with farmers in a wait-and-see mode due to commodity prices and government aid uncertainty [10][11] - European market, particularly Romania, benefited from EU stimulus funds, leading to increased buying activity [13] - Australian market conditions are similar to the domestic agriculture segment, with lower new order activity due to dry conditions and low commodity prices [15] Company Strategy and Development Direction - The company is focused on optimizing inventory and managing through the current market cycle, with a target of reducing equipment inventory by $100 million [22][23] - The strategy includes leveraging parts and service revenue, which is expected to contribute significantly to gross profit despite equipment sales pressures [9][27] - The company aims to emerge from the current down market as a stronger entity, emphasizing customer service and operational efficiency [16] Management's Comments on Operating Environment and Future Outlook - Management anticipates a subdued retail environment due to weak farmer profitability and undefined government support programs [6][7] - The company expects continued challenges in the agriculture segment, with revenue projected to decline by 20% to 25% for the full year [24] - For the construction segment, revenue is expected to decline by 5% to 10%, while the European segment is projected to grow by 23% to 28% [25][26] Other Important Information - The company has successfully reduced equipment inventory by approximately $13 million sequentially, with a cumulative reduction of $406 million from peak levels [22] - The adjusted debt to tangible net worth ratio was 1.8, well below the bank covenant of 3.5 times [22] Q&A Session Summary Question: Is there any positive outlook on the agricultural sector? - Management noted that some government payments have started to come through, providing stability, but the overall outlook remains challenging [32] Question: How is the construction sector performing? - Management indicated that while the construction sector is cautious, there is more optimism compared to agriculture, with contractors starting to fill their project backlogs [36][38] Question: What is the status of government support programs? - The USDA is looking to provide additional funding for natural disaster relief, which could help stabilize the agricultural sector [42][44] Question: Are there specific areas where inventory needs to be reduced? - Management highlighted that the focus is on reducing used inventory levels, particularly in the agriculture segment, while maintaining a healthy inventory mix [56][57] Question: What are the expectations for same store sales in agriculture? - Management expects same store sales in agriculture to be down about 30% year over year for Q2, with a challenging back half of the year anticipated [72]

First Quarter FY2026 Earnings Conference Call May 22, 2025 Safe Harbor Statement Forward-Looking Statements This presentation contains "forward-looking statements" within the meaning of the federal securities laws. Statements about our beliefs and expectations and statements containing the words "may," "could," "would," "should," "believe," "expect," "anticipate," "plan," "estimate," "target," "project," "intend" and similar expressions may constitute forward-looking statements. Except for historical inform ...

Group 1 - Deere reported quarterly earnings of $6.64 per share, exceeding the Zacks Consensus Estimate of $5.68 per share, but down from $8.53 per share a year ago, representing an earnings surprise of 16.90% [1] - The company posted revenues of $11.17 billion for the quarter ended April 2025, surpassing the Zacks Consensus Estimate by 4.89%, compared to year-ago revenues of $13.61 billion [2] - Deere has surpassed consensus EPS estimates four times over the last four quarters and topped consensus revenue estimates three times during the same period [2] Group 2 - The stock has gained approximately 17.4% since the beginning of the year, significantly outperforming the S&P 500's gain of 0.2% [3] - The current consensus EPS estimate for the upcoming quarter is $5.35 on revenues of $10.44 billion, and for the current fiscal year, it is $18.89 on revenues of $38.23 billion [7] - The Zacks Industry Rank for Manufacturing - Farm Equipment is currently in the bottom 36% of over 250 Zacks industries, indicating potential challenges for stock performance [8]

Group 1 - Kornit Digital reported quarterly earnings of $0.01 per share, exceeding the Zacks Consensus Estimate of a loss of $0.04 per share, and improved from a loss of $0.11 per share a year ago, representing an earnings surprise of 125% [1] - The company posted revenues of $46.46 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.32%, and compared to year-ago revenues of $43.78 million [2] - Kornit Digital has surpassed consensus EPS estimates three times over the last four quarters, indicating a positive trend in earnings performance [2] Group 2 - The stock has underperformed the market, losing about 37.8% since the beginning of the year, while the S&P 500 has gained 0.1% [3] - The current consensus EPS estimate for the coming quarter is $0.02 on revenues of $51.14 million, and for the current fiscal year, it is $0.22 on revenues of $214.74 million [7] - The Zacks Industry Rank for Commercial Printing is in the top 22% of over 250 Zacks industries, suggesting a favorable outlook for the industry [8]

Financial Data and Key Metrics Changes - First quarter revenue was $391 million, down from $425.6 million in the prior year, reflecting an 8% decrease [8][25] - Gross profit was $102.8 million with a margin of 26.3%, a slight increase of 10 basis points year-over-year [9][25] - Operating income was $44.5 million, down 5.4% from the previous year, but operating margin improved by 40 basis points [10][25] - Net income for the quarter was $31.8 million or $2.64 per diluted share, compared to $32.1 million or $2.57 per diluted share in the same period last year [10][25] - Total debt was $216.8 million, with net debt of $16.5 million, a significant improvement of 91.7% year-over-year [15][25] Business Line Data and Key Metrics Changes - The Industrial Equipment division reported record net sales of $227.1 million, representing 12.5% organic growth year-over-year [12][20] - The Vegetation Management division's net sales were $163.9 million, a decline of 26.8% compared to the previous year, but a sequential improvement of 2.6% [11][21] - Operating income for the Industrial Equipment division was $31.2 million, or 13.7% of net sales, reflecting a 20 basis point improvement [12][20] - The Vegetation Management division's operating income was $13.3 million, or 8.1% of net sales, down from $21.7 million in the prior year [21][25] Market Data and Key Metrics Changes - The backlog for the Industrial Equipment division was $513 million, down 8.3% year-over-year but up 6.6% sequentially [20] - Order bookings in the Vegetation Management division improved by nearly 18% year-over-year, marking the fifth consecutive quarter of improvement [22][25] - Agricultural equipment orders in North America were up 26% year-over-year, indicating a recovery in demand [22][25] Company Strategy and Development Direction - The company is focused on driving growth and optimizing operations while pursuing acquisition opportunities of meaningful scale [28][29] - Management emphasized the importance of maintaining a strong balance sheet and low net debt to support future investments [15][28] - The company plans to continue cost reduction initiatives and facility consolidations to enhance operational efficiency [61][63] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's prospects for the remainder of 2025, despite ongoing risks from tariffs and global market uncertainties [27][28] - The governmental and industrial contractor markets are expected to remain strong, with increased spending on maintenance-related activities [38][39] - Management anticipates a gradual recovery in the Vegetation Management division, with expectations for improved sales and margins in the second half of 2025 [41][52] Other Important Information - The company approved a quarterly dividend of $0.30 per share, reflecting its commitment to delivering long-term value to shareholders [15][25] - Interest expense decreased by $2.9 million due to lower debt levels, contributing to improved financial performance [10][25] Q&A Session Summary Question: What are the pain points from tariffs? - Management indicated that about 70% of revenue comes from the U.S., with minimal impact from tariffs on production shifts [31][32] Question: What is the inflationary impact on customer demand? - Management noted that demand may change primarily in non-governmental markets, with governmental spending remaining strong [37][38] Question: What drove the 40 basis point increase in operating margin? - Cost reduction initiatives and facility consolidations were key drivers behind the margin improvement [44][48] Question: What is the outlook for M&A and share buybacks? - M&A remains the first priority, with several opportunities being pursued, while share buybacks are considered if M&A does not materialize [50][51] Question: What is the outlook for vegetation revenues? - Management is optimistic about a gradual recovery in vegetation revenues, supported by improving order bookings and dealer restocking [52][56]

Core Viewpoint - The market anticipates a year-over-year decline in Deere's earnings due to lower revenues, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - Deere is expected to report quarterly earnings of $5.68 per share, reflecting a year-over-year decrease of 33.4% [3]. - Revenue projections stand at $10.65 billion, down 21.8% from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised down by 1.85% over the last 30 days, indicating a bearish sentiment among analysts [4]. - The Most Accurate Estimate for Deere is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -0.24% [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that a positive reading is a strong predictor of an earnings beat, particularly when combined with a favorable Zacks Rank [8]. - However, a negative Earnings ESP does not necessarily indicate an earnings miss, making predictions less reliable [9]. Historical Performance - In the last reported quarter, Deere exceeded expectations with earnings of $3.19 per share against an estimate of $3.13, resulting in a surprise of +1.92% [12]. - Over the past four quarters, Deere has consistently beaten consensus EPS estimates [13]. Conclusion - Despite the potential for an earnings miss, betting on stocks expected to beat earnings can improve success odds, highlighting the importance of monitoring Earnings ESP and Zacks Rank [15]. - Currently, Deere does not appear to be a strong candidate for an earnings beat, suggesting investors should consider other factors before making decisions [16].

Core Viewpoint - Deere has been gaining attention in the market, with its stock performance outpacing the broader S&P 500 index and the farm equipment industry, raising questions about its future trajectory [2]. Earnings Estimates - Deere is expected to report earnings of $5.68 per share for the current quarter, reflecting a year-over-year decline of -33.4%. The consensus estimate for the current fiscal year is $18.89, indicating a -26.3% change [5][6]. - The consensus earnings estimate for the next fiscal year is $21.17, which represents a +12.1% increase compared to the previous year [6]. Revenue Projections - The consensus sales estimate for the current quarter is $10.65 billion, showing a year-over-year decrease of -21.8%. For the current and next fiscal years, the sales estimates are $38.23 billion and $40.52 billion, indicating changes of -14.6% and +6%, respectively [11]. Recent Performance - In the last reported quarter, Deere's revenues were $6.81 billion, down -35.1% year-over-year, with an EPS of $3.19 compared to $6.23 a year ago. The reported revenues fell short of the Zacks Consensus Estimate of $7.7 billion by -11.51% [12]. - The company has consistently beaten consensus EPS estimates in the last four quarters and has exceeded revenue estimates three times during this period [13]. Valuation Metrics - Deere's valuation metrics suggest it is trading at a premium compared to its peers, receiving a Zacks Value Style Score of D, indicating potential overvaluation [17].