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CAPITAL GOODS: Deere (DE A1/A/A+): 4Q24 Results Preview

CAPITAL GOODS
USCredit BulletsBulletGlobalRegionNorth America
  • Deere reports on Thursday. It follows AGCO and CNH in the subsector, both of which missed meaningfully and downgraded FY guidance.
  • Looking at spreads over the past month, DE 32s have outperformed those peers and similar rated ITW (A1/A+/NR). The 39s appear to have normalised from a very flat curve.
  • The outlook for Agricultural equipment remains challenging, with crop prices pressuring farmers’ profits and high dealer inventories. On the positive side, Deere has developed recurring revenue streams from tech solutions. Construction equipment is also constrained by weak end markets. Risk appears skewed to the downside into 4Q results.
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  • Deere reports on Thursday. It follows AGCO and CNH in the subsector, both of which missed meaningfully and downgraded FY guidance.
  • Looking at spreads over the past month, DE 32s have outperformed those peers and similar rated ITW (A1/A+/NR). The 39s appear to have normalised from a very flat curve.
  • The outlook for Agricultural equipment remains challenging, with crop prices pressuring farmers’ profits and high dealer inventories. On the positive side, Deere has developed recurring revenue streams from tech solutions. Construction equipment is also constrained by weak end markets. Risk appears skewed to the downside into 4Q results.