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The Intrinsic Value Podcast - The Investor’s Podcast Network

TIVP004: John Deere (DE): Sowing the Seeds of Growth w/ Shawn O’Malley

Jan 26, 2025
Explore the fascinating evolution of John Deere from a classic tractor maker to a tech innovator with autonomous machinery. Discover the deep loyalty farmers have for the brand and how digital advancements are optimizing agriculture. Learn about Deere's strategic shifts toward subscription models and the cyclical nature of their business. Dive into their financial landscape, including valuation, debt management, and the integration of cutting-edge technologies transforming farming practices.
01:12:53

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Quick takeaways

  • John Deere has successfully maintained its position as an industry leader for nearly two hundred years through continuous innovation and adaptation.
  • The company's strategic shift towards a subscription-based revenue model aims to reduce earnings cyclicality and enhance financial stability.

Deep dives

John Deere's Evolving Identity

John Deere is recognized not only as a leading agricultural equipment manufacturer but also as a technology and financial services company. Over its long history, the company has embraced innovations in technology, notably through advancements like GPS and machine learning, which enhance farming efficiency. With the integration of smart machinery and software solutions, Deere aims to transform its business model from traditional equipment sales to a more subscription-based, recurring revenue model. This strategic shift is expected to reduce cyclicality in its earnings, potentially stabilizing its financial performance.

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