Deere & Company
Industrials · Agricultural & Farm Machinery
0) is becoming a software/SaaS-adjacent recurring layer on top of cyclical iron. Captive credit arm (~$60B receivables) is both a moat (dealer financing lock-in) and a cycle amplifier.
(1) precision-ag attach + per-acre subscription monetization shifts mix toward software-like margins; (2) See & Spray cuts herbicide use 60%+ - durable ROI for the farmer regardless of crop prices; (3) replacement cycle on aging US fleet sets a floor on large-ag demand; (4) construction & forestry exposure to US infra/data-center buildout via $WIRTGEN paving + $CAT-adjacent verticals; (5) buyback cadence + financial services FCF smooths the cycle.
(1) ag cycle late-stage - corn/soy prices well off 2022 highs, farmer cash receipts compressing, used-equipment inventory rebuilding; (2) elevated dealer inventory + order-book normalization → margin give-back on large ag; (3) captive credit book sensitive to farm-bankruptcy tick-up and rate path; (4) Brazil/EU farmer credit and FX a recurring drag; (5) tariff/retaliation exposure on $CAT-style export business; (6) precision-ag monetization curve slower than bull-case narrative - software ARR still a small slice of revenue.
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