Investing.com -- Melius Research upgraded Deere (NYSE:DE) to Buy and raised its two-year price target to $750, saying the equipment maker’s leadership in agricultural technology is poised to deliver transformational value.
While the timing of a market re-rating remains uncertain, the company is moving closer to realizing meaningful recurring revenue from its software and data offerings.
Deere aims to generate about 10% of sales from recurring revenue by 2030, roughly $5 billion, and Melius believes that potential is now becoming visible enough for investors to start pricing in.
According to Melius, Deere’s “full-stack” offering, integrating advanced hardware, sensors, software, and a strong dealer network, creates a formidable barrier for competitors.
The analysts argue that these systems are already delivering measurable benefits for farmers and will become increasingly indispensable over time.
While tech investors have yet to fully engage with Deere, Melius said the company is 5–10 years ahead in data capture and usage, aided by its Operations Center platform and a shift in farmer attitudes toward SaaS-like models.
Connectivity improvements in rural areas, such as those enabled by Starlink, are also helping adoption.
Beyond tech, Melius sees additional upside from Deere’s growing presence in Latin America, parts business, and potential for autonomy in smaller ag and construction.
Risks include affordability for smaller farmers and uncertainty in how investors will ultimately value Deere’s recurring revenue streams.
“Investors can forecast with high confidence that Deere will lead in ag tech, whether in 5 years or 15+,” the firm said.
