Recently, American tractor mainstay Deere (NYSE:DE) put up some downright upsetting news: massive layoffs were coming as the American tractor mainstay decided that it was likely better off to be produced in Mexico. That prompted a slew of shareholders to write John Deere a Dear John and sell off, sending Deere shares slumping over 2% in Monday afternoon’s trading.
It’s the world’s largest seller of crop harvesters and tractors alike, but that didn’t protect Deere jobs as about 610 of them faced layoffs in plants in both East Moline, Illinois and both Davenport and Dubuque, Iowa. The East Moline plant will lose 280 jobs, reports noted, while the Dubuque plant will lose 230. Meanwhile, the Davenport plant will see about 100 jobs lost, and no matter where your job gets lost from, it will be gone starting August 30.
As for why the layoffs took place to begin with, the reason seems simple: a lack of demand. That might seem a bit hard to swallow in light of the fact that Deere brought in $10.166 billion in profits in 2023, but for those particular plants, that might be the case. Of course, if that is the case, it’s easy to wonder why no one was offered jobs at other plants that are clearly doing land-office business.
Need, Or Greed?
Naturally, when a move like this comes along—particularly at a profitable company—it’s easy to wonder what the true motives are. Workers at the East Moline plant are already calling it “greed” that prompted the move, to the point where one employee would only talk with anonymity protections.
However, it’s also worth noting that the CEO of John Deere, John May, is selling off his horse farm in Illinois. The 80-acre property, complete with outbuildings and a “barndominium” currently has a price tag of $3.925 million on it, and can be seen in Port Byron, a village which isn’t all that far from the Moline headquarters.
Is John Deere Stock a Buy, Sell or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on DE stock based on 10 Buys and seven Holds assigned in the past three months, as indicated by the graphic below. After a 8.78% loss in its share price over the past year, the average DE price target of $423.81 per share implies 16.21% upside potential.
