Deere and Co

“Deere is among the highest-quality industrials globally — wide moat, elite through-cycle ROIC, disciplined capital allocation, and a credible precision ag software option — but at ~21x normalized mid-cycle earnings ($562/share), the market has priced the franchise correctly, leaving no margin of safety for new buyers. The cyclical trough creates the appearance of value on trailing metrics but not on normalized earnings. The investment case improves materially in the $400-450 range, where the long-term return potential approaches 3x over 10 years. Until then, this is a business to track closely and size up on weakness, not a compelling entry at current prices.”