Should You Invest in John Deere Following Its Latest Earnings?

John Deere comprehensively beat analyst estimates for its fiscal Q4 earnings, so should you consider investing in the agricultural giant?

Nov. 25, 2021

Agricultural equipment manufacturer Deere and Company (NYSE: DE), operating under the brand name John Deere, reported its fiscal fourth-quarter earnings yesterday. Much to the delight of its investors, the company detailed an impressive earnings beat, posting earnings per share (EPS) of $4.12 against an estimated $3.87, on revenue of $11.3 billion versus a predicted $10.46 billion.

This impressive performance against the analysts has prompted a surge in the company’s share price of over 5%. The earnings beat, coupled with a more than solid outlook for 2022, should have investors very pleased.

Why does this matter for investors?

John Deere has seen an impressive rise in stock price this year, already up over 37% year-to-date (YTD) at time of writing. And even with an impressive quarter of earnings at its back, investors will be more interested in the bullish outlook put forward by the agricultural giant in Wednesday’s call.

CEO John May projected a profitable 2022, outlining that “we expect demand for farm and construction equipment to continue benefiting from positive fundamentals, including favorable crop prices, economic growth, and increased investment in infrastructure.” May was also quick to express concern about worrying global supply chain issues but reiterated how John Deere is working closely with suppliers to mitigate any and all difficulties that may be faced.

Investors will also be pleased to hear that the strike action, which took up the bulk of headlines surrounding the company last month, has been solved. A new six-year agreement between management and union workers was signed last week to hopefully usher in a less tumultuous era for the firm.

So should I buy Deere stock?

John Deere has plenty of positive factors going for it right now. A proactive move by upper management to deal with significant employee issues should be seen as a win, and the company seems to be managing rising inflation and continuing supply chain issues as well as anyone could hope.

Solid earnings and a positive 2022 outlook has the company in a strong position for growth and, as such, it appears that it would form a solid part of any investment portfolio. If the company continues to outperform analyst expectations, we’d be remiss not to consider investing.

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