Analyst Note| Dawit Woldemariam |
Deere’s fourth-quarter results showed resilience despite continuing supply chain constraints and a labor strike. This led us to increase our near-term revenue and margins assumptions for the company, pushing our fair value estimate to $260 per share from $256. While we expect supply chain challenges to persist throughout 2022, we remain confident in Deere’s ability to offset cost increases, thanks to its pricing power. In the quarter, the company benefited from favorable price realization across its segments, which was up by midsingle digits on average. Management expects high-single-digit price realization in 2022, given strong demand for its equipment.