Intrinsic value of Deere - DE

Previous Close

$167.43

  Intrinsic Value

$515.58

stock screener

  Rating & Target

str. buy

+208%

Previous close

$167.43

 
Intrinsic value

$515.58

 
Up/down potential

+208%

 
Rating

str. buy

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of DE stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2017(a)
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  11.61
  23.00
  21.20
  19.58
  18.12
  16.81
  15.63
  14.57
  13.61
  12.75
  11.97
  11.28
  10.65
  10.08
  9.58
  9.12
  8.71
  8.34
  8.00
  7.70
  7.43
  7.19
  6.97
  6.77
  6.60
  6.44
  6.29
  6.16
  6.05
  5.94
  5.85
Revenue, $m
  29,738
  36,578
  44,332
  53,012
  62,619
  73,146
  84,577
  96,897
  110,084
  124,118
  138,979
  154,651
  171,119
  188,374
  206,412
  225,232
  244,841
  265,249
  286,474
  308,537
  331,466
  355,294
  380,056
  405,795
  432,559
  460,398
  489,367
  519,527
  550,941
  583,678
  617,810
Variable operating expenses, $m
 
  21,850
  26,460
  31,621
  37,332
  43,590
  50,387
  57,711
  65,551
  73,895
  82,730
  91,944
  101,735
  111,993
  122,717
  133,906
  145,564
  157,698
  170,316
  183,434
  197,066
  211,231
  225,953
  241,256
  257,168
  273,719
  290,941
  308,872
  327,549
  347,012
  367,304
Fixed operating expenses, $m
 
  8,168
  8,372
  8,582
  8,796
  9,016
  9,242
  9,473
  9,709
  9,952
  10,201
  10,456
  10,717
  10,985
  11,260
  11,541
  11,830
  12,126
  12,429
  12,740
  13,058
  13,385
  13,719
  14,062
  14,414
  14,774
  15,143
  15,522
  15,910
  16,308
  16,716
Total operating expenses, $m
  25,566
  30,018
  34,832
  40,203
  46,128
  52,606
  59,629
  67,184
  75,260
  83,847
  92,931
  102,400
  112,452
  122,978
  133,977
  145,447
  157,394
  169,824
  182,745
  196,174
  210,124
  224,616
  239,672
  255,318
  271,582
  288,493
  306,084
  324,394
  343,459
  363,320
  384,020
Operating income, $m
  4,171
  6,560
  9,500
  12,810
  16,491
  20,539
  24,949
  29,713
  34,823
  40,271
  46,048
  52,251
  58,667
  65,395
  72,434
  79,784
  87,446
  95,426
  103,729
  112,364
  121,343
  130,678
  140,383
  150,477
  160,978
  171,905
  183,282
  195,132
  207,482
  220,358
  233,790
EBITDA, $m
  5,887
  8,134
  11,385
  15,045
  19,112
  23,583
  28,452
  33,712
  39,352
  45,364
  51,738
  58,468
  65,546
  72,968
  80,732
  88,838
  97,289
  106,089
  115,245
  124,767
  134,668
  144,960
  155,662
  166,790
  178,366
  190,413
  202,954
  216,017
  229,630
  243,822
  258,626
Interest expense (income), $m
  903
  1,075
  1,452
  1,880
  2,359
  2,890
  3,470
  4,101
  4,781
  5,509
  6,284
  7,104
  7,969
  8,878
  9,830
  10,825
  11,864
  12,946
  14,073
  15,244
  16,462
  17,727
  19,042
  20,409
  21,829
  23,306
  24,843
  26,442
  28,106
  29,840
  31,647
Earnings before tax, $m
  3,154
  5,485
  8,048
  10,930
  14,132
  17,650
  21,479
  25,612
  30,042
  34,762
  39,765
  45,147
  50,698
  56,518
  62,605
  68,959
  75,582
  82,479
  89,656
  97,120
  104,881
  112,950
  121,341
  130,068
  139,148
  148,599
  158,439
  168,691
  179,376
  190,518
  202,144
Tax expense, $m
  971
  1,481
  2,173
  2,951
  3,816
  4,765
  5,799
  6,915
  8,111
  9,386
  10,736
  12,190
  13,688
  15,260
  16,903
  18,619
  20,407
  22,269
  24,207
  26,222
  28,318
  30,497
  32,762
  35,118
  37,570
  40,122
  42,779
  45,546
  48,431
  51,440
  54,579
Net income, $m
  2,159
  4,004
  5,875
  7,979
  10,316
  12,884
  15,679
  18,697
  21,931
  25,376
  29,028
  32,957
  37,010
  41,258
  45,701
  50,340
  55,175
  60,210
  65,449
  70,898
  76,563
  82,454
  88,579
  94,950
  101,578
  108,477
  115,661
  123,144
  130,944
  139,078
  147,565

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  9,335
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  65,786
  69,407
  84,122
  100,593
  118,822
  138,796
  160,488
  183,865
  208,888
  235,518
  263,718
  293,455
  324,704
  357,446
  391,673
  427,385
  464,593
  503,319
  543,594
  585,460
  628,969
  674,181
  721,169
  770,010
  820,795
  873,620
  928,590
  985,819
  1,045,428
  1,107,548
  1,172,315
Adjusted assets (=assets-cash), $m
  56,451
  69,407
  84,122
  100,593
  118,822
  138,796
  160,488
  183,865
  208,888
  235,518
  263,718
  293,455
  324,704
  357,446
  391,673
  427,385
  464,593
  503,319
  543,594
  585,460
  628,969
  674,181
  721,169
  770,010
  820,795
  873,620
  928,590
  985,819
  1,045,428
  1,107,548
  1,172,315
Revenue / Adjusted assets
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
Average production assets, $m
  5,992
  7,352
  8,911
  10,656
  12,586
  14,702
  17,000
  19,476
  22,127
  24,948
  27,935
  31,085
  34,395
  37,863
  41,489
  45,272
  49,213
  53,315
  57,581
  62,016
  66,625
  71,414
  76,391
  81,565
  86,944
  92,540
  98,363
  104,425
  110,739
  117,319
  124,180
Working capital, $m
  0
  5,926
  7,182
  8,588
  10,144
  11,850
  13,702
  15,697
  17,834
  20,107
  22,515
  25,053
  27,721
  30,517
  33,439
  36,488
  39,664
  42,970
  46,409
  49,983
  53,698
  57,558
  61,569
  65,739
  70,075
  74,584
  79,277
  84,163
  89,252
  94,556
  100,085
Total debt, $m
  40,045
  41,494
  53,721
  67,409
  82,557
  99,156
  117,182
  136,608
  157,402
  179,531
  202,965
  227,677
  253,645
  280,854
  309,296
  338,973
  369,893
  402,074
  435,543
  470,333
  506,489
  544,061
  583,107
  623,695
  665,897
  709,794
  755,474
  803,031
  852,567
  904,188
  958,010
Total liabilities, $m
  56,229
  57,678
  69,905
  83,593
  98,741
  115,340
  133,366
  152,792
  173,586
  195,715
  219,149
  243,861
  269,829
  297,038
  325,480
  355,157
  386,077
  418,258
  451,727
  486,517
  522,673
  560,245
  599,291
  639,879
  682,081
  725,978
  771,658
  819,215
  868,751
  920,372
  974,194
Total equity, $m
  9,557
  11,730
  14,217
  17,000
  20,081
  23,457
  27,123
  31,073
  35,302
  39,802
  44,568
  49,594
  54,875
  60,408
  66,193
  72,228
  78,516
  85,061
  91,867
  98,943
  106,296
  113,937
  121,877
  130,132
  138,714
  147,642
  156,932
  166,603
  176,677
  187,176
  198,121
Total liabilities and equity, $m
  65,786
  69,408
  84,122
  100,593
  118,822
  138,797
  160,489
  183,865
  208,888
  235,517
  263,717
  293,455
  324,704
  357,446
  391,673
  427,385
  464,593
  503,319
  543,594
  585,460
  628,969
  674,182
  721,168
  770,011
  820,795
  873,620
  928,590
  985,818
  1,045,428
  1,107,548
  1,172,315
Debt-to-equity ratio
  4.190
  3.540
  3.780
  3.970
  4.110
  4.230
  4.320
  4.400
  4.460
  4.510
  4.550
  4.590
  4.620
  4.650
  4.670
  4.690
  4.710
  4.730
  4.740
  4.750
  4.760
  4.780
  4.780
  4.790
  4.800
  4.810
  4.810
  4.820
  4.830
  4.830
  4.840
Adjusted equity ratio
  0.145
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169
  0.169

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  2,159
  4,004
  5,875
  7,979
  10,316
  12,884
  15,679
  18,697
  21,931
  25,376
  29,028
  32,957
  37,010
  41,258
  45,701
  50,340
  55,175
  60,210
  65,449
  70,898
  76,563
  82,454
  88,579
  94,950
  101,578
  108,477
  115,661
  123,144
  130,944
  139,078
  147,565
Depreciation, amort., depletion, $m
  1,716
  1,574
  1,885
  2,234
  2,621
  3,044
  3,503
  3,999
  4,529
  5,093
  5,690
  6,217
  6,879
  7,573
  8,298
  9,054
  9,843
  10,663
  11,516
  12,403
  13,325
  14,283
  15,278
  16,313
  17,389
  18,508
  19,673
  20,885
  22,148
  23,464
  24,836
Funds from operations, $m
  608
  5,578
  7,760
  10,213
  12,937
  15,928
  19,183
  22,695
  26,459
  30,469
  34,718
  39,174
  43,889
  48,831
  53,999
  59,394
  65,018
  70,873
  76,965
  83,301
  89,888
  96,737
  103,857
  111,263
  118,967
  126,985
  135,333
  144,029
  153,092
  162,542
  172,401
Change in working capital, $m
  -1,592
  1,108
  1,256
  1,406
  1,556
  1,705
  1,852
  1,996
  2,136
  2,273
  2,408
  2,539
  2,668
  2,795
  2,922
  3,049
  3,177
  3,306
  3,438
  3,574
  3,715
  3,860
  4,011
  4,170
  4,336
  4,510
  4,693
  4,886
  5,089
  5,303
  5,529
Cash from operations, $m
  2,200
  4,470
  6,504
  8,807
  11,380
  14,223
  17,331
  20,699
  24,323
  28,196
  32,311
  36,635
  41,221
  46,035
  51,077
  56,345
  61,841
  67,567
  73,527
  79,727
  86,174
  92,877
  99,846
  107,093
  114,631
  122,475
  130,640
  139,143
  148,003
  157,239
  166,871
Maintenance CAPEX, $m
  0
  -1,198
  -1,470
  -1,782
  -2,131
  -2,517
  -2,940
  -3,400
  -3,895
  -4,425
  -4,990
  -5,587
  -6,217
  -6,879
  -7,573
  -8,298
  -9,054
  -9,843
  -10,663
  -11,516
  -12,403
  -13,325
  -14,283
  -15,278
  -16,313
  -17,389
  -18,508
  -19,673
  -20,885
  -22,148
  -23,464
New CAPEX, $m
  -2,592
  -1,360
  -1,559
  -1,745
  -1,931
  -2,116
  -2,298
  -2,476
  -2,651
  -2,821
  -2,987
  -3,150
  -3,310
  -3,468
  -3,626
  -3,783
  -3,941
  -4,102
  -4,266
  -4,435
  -4,609
  -4,789
  -4,977
  -5,174
  -5,379
  -5,596
  -5,823
  -6,062
  -6,314
  -6,580
  -6,861
Cash from investing activities, $m
  -1,644
  -2,558
  -3,029
  -3,527
  -4,062
  -4,633
  -5,238
  -5,876
  -6,546
  -7,246
  -7,977
  -8,737
  -9,527
  -10,347
  -11,199
  -12,081
  -12,995
  -13,945
  -14,929
  -15,951
  -17,012
  -18,114
  -19,260
  -20,452
  -21,692
  -22,985
  -24,331
  -25,735
  -27,199
  -28,728
  -30,325
Free cash flow, $m
  556
  1,911
  3,475
  5,280
  7,318
  9,590
  12,092
  14,823
  17,777
  20,949
  24,334
  27,899
  31,694
  35,688
  39,879
  44,265
  48,845
  53,622
  58,598
  63,776
  69,162
  74,762
  80,586
  86,641
  92,939
  99,491
  106,309
  113,409
  120,804
  128,511
  136,547
Issuance/(repayment) of debt, $m
  4,616
  10,784
  12,228
  13,687
  15,149
  16,598
  18,026
  19,426
  20,794
  22,129
  23,434
  24,712
  25,968
  27,209
  28,442
  29,677
  30,920
  32,181
  33,469
  34,791
  36,156
  37,572
  39,046
  40,588
  42,202
  43,897
  45,680
  47,557
  49,535
  51,621
  53,822
Issuance/(repurchase) of shares, $m
  523
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  5,051
  10,784
  12,228
  13,687
  15,149
  16,598
  18,026
  19,426
  20,794
  22,129
  23,434
  24,712
  25,968
  27,209
  28,442
  29,677
  30,920
  32,181
  33,469
  34,791
  36,156
  37,572
  39,046
  40,588
  42,202
  43,897
  45,680
  47,557
  49,535
  51,621
  53,822
Total cash flow (excl. dividends), $m
  5,763
  12,695
  15,703
  18,968
  22,467
  26,188
  30,119
  34,249
  38,571
  43,079
  47,768
  52,610
  57,661
  62,897
  68,321
  73,941
  79,765
  85,803
  92,066
  98,566
  105,317
  112,334
  119,632
  127,229
  135,141
  143,388
  151,989
  160,966
  170,339
  180,132
  190,369
Retained Cash Flow (-), $m
  -3,037
  -2,173
  -2,487
  -2,784
  -3,081
  -3,376
  -3,666
  -3,951
  -4,229
  -4,500
  -4,766
  -5,026
  -5,281
  -5,533
  -5,784
  -6,035
  -6,288
  -6,545
  -6,806
  -7,075
  -7,353
  -7,641
  -7,941
  -8,254
  -8,583
  -8,927
  -9,290
  -9,672
  -10,074
  -10,498
  -10,946
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  10,522
  13,216
  16,184
  19,386
  22,812
  26,453
  30,299
  34,342
  38,578
  43,002
  47,585
  52,380
  57,363
  62,537
  67,906
  73,477
  79,259
  85,260
  91,491
  97,964
  104,693
  111,692
  118,974
  126,558
  134,461
  142,699
  151,294
  160,265
  169,634
  179,423
Discount rate, %
 
  9.80
  10.29
  10.80
  11.34
  11.91
  12.51
  13.13
  13.79
  14.48
  15.20
  15.96
  16.76
  17.60
  18.48
  19.40
  20.37
  21.39
  22.46
  23.58
  24.76
  26.00
  27.30
  28.67
  30.10
  31.61
  33.19
  34.85
  36.59
  38.42
  40.34
PV of cash for distribution, $m
 
  9,583
  10,865
  11,896
  12,613
  12,995
  13,043
  12,773
  12,218
  11,424
  10,444
  9,331
  8,158
  6,972
  5,823
  4,750
  3,781
  2,936
  2,222
  1,637
  1,173
  817
  552
  361
  229
  140
  83
  47
  26
  14
  7
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Deere & Company is engaged in equipment operations. The Company is engaged in providing financial services. The Company operates through three business segments: agriculture and turf, construction and forestry, and financial services. The agriculture and turf segment manufactures and distributes a line of agriculture and turf equipment and related service parts. The construction and forestry segment provides a line of construction equipment, and forestry machines and attachments available in the world. The construction and forestry segment is also engaged in providing fleet management telematics solutions. The financial services segment primarily finances sales and leases by the Company dealers of new and used agriculture and turf equipment and construction and forestry equipment. The financial services segment also provides wholesale financing to dealers of the foregoing equipment, finances retail revolving charge accounts and offers extended equipment warranties.

FINANCIAL RATIOS  of  Deere (DE)

Valuation Ratios
P/E Ratio 25
Price to Sales 1.8
Price to Book 5.6
Price to Tangible Book
Price to Cash Flow 24.5
Price to Free Cash Flow -137.5
Growth Rates
Sales Growth Rate 11.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -12.3%
Cap. Spend. - 3 Yr. Gr. Rate -0.5%
Financial Strength
Quick Ratio 1
Current Ratio NaN
LT Debt to Equity 270.9%
Total Debt to Equity 419%
Interest Coverage 4
Management Effectiveness
Return On Assets 4.5%
Ret/ On Assets - 3 Yr. Avg. 4%
Return On Total Capital 4.7%
Ret/ On T. Cap. - 3 Yr. Avg. 4.2%
Return On Equity 26.9%
Return On Equity - 3 Yr. Avg. 24.8%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 28.9%
Gross Margin - 3 Yr. Avg. 27%
EBITDA Margin 19.4%
EBITDA Margin - 3 Yr. Avg. 17.7%
Operating Margin 14%
Oper. Margin - 3 Yr. Avg. 11.9%
Pre-Tax Margin 10.6%
Pre-Tax Margin - 3 Yr. Avg. 9.5%
Net Profit Margin 7.3%
Net Profit Margin - 3 Yr. Avg. 6.6%
Effective Tax Rate 30.8%
Eff/ Tax Rate - 3 Yr. Avg. 30.8%
Payout Ratio 35.4%

DE stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the DE stock intrinsic value calculation we used $29738 million for the last fiscal year's total revenue generated by Deere. The default revenue input number comes from 2017 income statement of Deere. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our DE stock valuation model: a) initial revenue growth rate of 23% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 9.8%, whose default value for DE is calculated based on our internal credit rating of Deere, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Deere.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of DE stock the variable cost ratio is equal to 59.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $7969 million in the base year in the intrinsic value calculation for DE stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Deere.

Corporate tax rate of 27% is the nominal tax rate for Deere. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the DE stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for DE are equal to 20.1%.

Life of production assets of 4 years is the average useful life of capital assets used in Deere operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for DE is equal to 16.2%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $9557 million for Deere - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 323.749 million for Deere is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Deere at the current share price and the inputted number of shares is $54.2 billion.

RELATED COMPANIES Price Int.Val. Rating
AGCO AGCO 73.02 70.92  hold
TTC Toro 66.69 44.40  sell
CAT Caterpillar 168.50 289.16  str.buy
LNN Lindsay 92.09 55.81  sell
ARTW Art's Way 2.95 1.02  str.sell
LOW Lowe's 101.68 69.99  sell
HD Home Depot 199.82 121.68  sell

COMPANY NEWS

▶ Deere Season? Maybe Not   [Jan-12-18 11:22AM  Barrons.com]
▶ Bet the Farm on Deere   [02:45PM  Barrons.com]
▶ Deere upgraded to outperform at RBC   [01:49PM  CNBC Videos]
▶ 3 Stocks Rising Into Their Reports   [Jan-08-18 06:30PM  Zacks]
▶ ETFs with exposure to Deere & Co. : January 1, 2018   [Jan-01-18 11:32AM  Capital Cube]
▶ Recalls this week: dining benches, mattresses, work boots   [Dec-22-17 02:30PM  Associated Press]
▶ ETFs with exposure to Deere & Co. : December 21, 2017   [Dec-21-17 11:24AM  Capital Cube]
▶ Can Deeres Stock Price Continue to Rise?   [09:01AM  Market Realist]
▶ Deeres Valuation Compared to Caterpillar   [07:32AM  Market Realist]
▶ Deere: Wall Streets Views at the End of 2017   [Dec-18-17 10:33AM  Market Realist]
▶ Deere Keeps the Dividend Unchanged for 1Q18   [09:04AM  Market Realist]
▶ The Most Wonderful Time Of The Year For Stocks   [Dec-04-17 03:42PM  Forbes]
▶ What Deere Purchase Means for AgTech Startup Industry   [Dec-02-17 12:48PM  TheStreet.com]
▶ Top Stock Reports for JPMorgan, Deere & VMware   [Dec-01-17 05:43PM  Zacks]
▶ 3 Industrial Stocks to Buy As Tech Dips   [Nov-29-17 05:59PM  Zacks]
▶ Deere Reports Strong Fiscal 4Q17 Earnings   [08:12AM  Market Realist]
▶ Analysts Raise Deeres Target Price after 4Q17   [07:31AM  Market Realist]
▶ [$$] Bill Gates Finds Redemption   [Nov-24-17 02:02PM  Barrons.com]
▶ Company News For Nov 24, 2017   [10:32AM  Zacks]
▶ [$$] Good as It Gets for Deere Stock   [Nov-23-17 11:56PM  The Wall Street Journal]
▶ Deere and Axalta climb while Hewlett Packard Enterprise dips   [Nov-22-17 04:53PM  Associated Press]
▶ H.P. among the IQ100 laggards   [02:54PM  CNBC Videos]
▶ [$$] Deere Earnings Helped by Equipment Demand   [12:32PM  The Wall Street Journal]
Financial statements of DE
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