Melius Research upgraded Deere (NYSE:DE) to Buy from Hold, boosting its price target to $750, citing growing confidence in the company’s transformation into a tech-driven agricultural powerhouse.
After a prolonged period of caution, the firm sees Deere’s dominant position in precision agriculture and smart farming solutions as a major value catalyst. While the exact timing of a broader cyclical recovery in the ag sector remains unclear, Melius believes the market will soon begin recognizing the long-term earnings potential embedded in Deere’s recurring revenue model.
Deere is targeting recurring and SaaS-style revenue to represent 10% of total sales—an opportunity estimated at $5 billion by 2030. As adoption of these technologies accelerates and the benefits to farmers become more tangible, the firm expects investors to increasingly price in this high-margin growth potential.
With a vast runway for further expansion and monetization of its ag tech innovations, Deere is now viewed by Melius as not just a cyclical equipment manufacturer but a platform for recurring value creation.
