DE – Market expectations are for record-high Uniform ROA, but management may have concerns about sales, production disruptions, and autonomous systems

• Deere & Company (DE:USA) currently trades above historical averages relative to UAFRS-based (Uniform) earnings, with a 16.6x Uniform P/E. At these levels, the market is pricing in bullish expectations for the firm, but management may have concerns about sales growth, production disruptions, and their autonomous production system.
  
  
• Specifically, management may have concerns about the impact of farm labor shortages on their customers, the sustainability of their market share in excavators, and continued production disruptions due to supply chain headwinds. In addition, they may lack confidence in their ability to maintain precision agriculture operating margins, small agriculture and turf net sales, and worldwide financial services net income. Furthermore, they may also lack confidence in their ability to introduce fully autonomous production systems for non-tractor machine forms and they may be overstating the capabilities of their next generation construction equipment.