The U.S. Federal Trade Commission (FTC) filed a lawsuit against farm equipment manufacturer Deere (DE) that accuses the company of illegally inflating repair costs by forcing farmers to use its authorized dealer network. According to the FTC, Deere’s practice makes it harder for farmers to use independent mechanics or handle repairs themselves, which boosts the company’s profits at farmers’ expense.
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The Biden administration has been cracking down on anti-competitive practices in the agriculture sector by focusing on issues like farmer treatment by meat processors, competition in the seed market, and the right-to-repair debate that impacts industries beyond farming, such as electronics. FTC Chair Lina Khan emphasized that restrictive repair policies can harm farmers who depend on affordable and timely repairs to maintain their livelihoods.
The FTC noted that Deere exclusively produces the software needed to repair its equipment and only provides it to authorized dealers. This allows it to maintain a 100% market share and raise prices. Deere responded by stating it had not been formally notified of the lawsuit but highlighted a pilot program that offers more self-repair options. The lawsuit, which is joined by Illinois and Minnesota, aims to make Deere’s repair tools accessible to farmers and independent repair providers.
Is DE Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on DE stock based on six Buys, seven Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. After a 13% rally in its share price over the past year, the average DE price target of $473.31 per share implies 9.7% upside potential.
