Deere & Company manufactures and distributes various equipment worldwide. The company operates through four segments: Production and Precision Agriculture, Small Agriculture and Turf, Construction and Forestry, and Financial Services. Deere & Company was founded in 1837 and is headquartered in Moline, Illinois. This week, I fundamentally analyze Deere & Co.’s stock. I review John Deere’s annual report and its operating segments, analyze the key ratios, and derive the intrinsic value using Discounted Cash Flow (DCF) analysis. Since this is a long video, please feel free to use the time stamps in the video if you only wish to watch certain topics.
I review various key ratios such as Revenue, Net Income, Shares outstanding, Dividends, Payout Ratio, Free Cash Flows (FCF), Financial Leverage, Current Ratio, Debt to Equity Ratio, Return on Equity (ROE), Days Sales Outstanding (DSO), Days Inventory, Payable Period, Cash Conversion Cycle, Inventory Turnover, etc.
After taking into account Deer & Co.’s 2021 free cash flow of $5,146 million, a 9% growth rate of FCF (growth for the next 10 years), 10% discount rate, 2.242% long term growth rate (growth from the 10 year mark in the future to perpetuity), 314 million shares outstanding, and $32,848 million of long term debt, the DCF analysis yields us an intrinsic value of $246.64 per share.
0:24 Business Overview
8:10 Key Ratios Analysis
18:12 Discounted Cash Flow Analysis / Intrinsic Value
Deere & Company’s Website: here.
Morningstar Key Ratios Link: here.
Useful Resources here.
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