1 / 15

Deere & Company - Farm and Construction Machinery

Deere & Company - Farm and Construction Machinery. Bill Dailey 02/12/2014. Deere & Company. Segments Agriculture and Turf - $29.1B Construction and Forestry - $5.9B Power Systems (engines) Parts and Services - $682M Financial Services - $2.1B 2013

joan-craft
Download Presentation

Deere & Company - Farm and Construction Machinery

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Deere & Company - Farm and Construction Machinery Bill Dailey 02/12/2014

  2. Deere & Company • Segments • Agriculture and Turf - $29.1B • Construction and Forestry - $5.9B • Power Systems (engines) • Parts and Services - $682M • Financial Services - $2.1B • 2013 • Income of $3.54B on revenues of $37.8B • Third consecutive year of record earnings, eighth time in last ten years • Quarterly dividend increased by 11% to $1.99/share

  3. Company Comparisons • Caterpillar is most similar • Both have financing operations • Caterpillar’s revenues come mainly from their construction and mining divisions • Joy Global • Operates in the mining industry • Much smaller revenue numbers • Komatsu • Operates mainly in the construction industry • Very small portion in the farming industry • Tractor and Agriculture Machinery Manufacturing • Deere holds 40%, followed by CNH Industrial with 11.7%

  4. Regression Analysis

  5. Beta Estimates

  6. Cost of Equity Capital - CAPM

  7. Bloomberg Beta

  8. Cost of Debt Capital

  9. Cost of Debt Capital

  10. Cost of Debt Capital - RNFL

  11. Cost of Enterprise Capital

  12. Bloomberg WACC

  13. Assumptions • Sales Growth Rate • Net Sales and Other Income - 2.0% • Stagnant growth in the beginning due to sale of JD Landscapes • ‘Eyes on the Horizon’ initiative - $50B in sales by 2018 • Finance and Interest Income - 5.0% • Successful portfolio of receivables • Low level of uncollectable accounts • Enterprise Profit Margin (EPM) - 10.5% • Leaders within the agriculture industry - pricing premium • Enterprise Asset Turnover (EATO) - .85 • Increasing the size of the financing portfolio • Attempting to localize manufacturing - 7 new factories in 2013

  14. Discounted Cash Flow Model

  15. Discounted Cash Flow Model

More Related