Deere settles $9.93M bribery probe, stock slips

Deere & Co., known for its agricultural machinery, has agreed to a $9.93 million settlement with the SEC due to violations of the Foreign Corrupt Practices Act. The investigation revealed that its subsidiary, Wirtgen Thailand, made improper payments to foreign officials, including members of Thailand's Royal Air Force. This legal issue has negatively impacted Deere's stock performance, which has seen a decline of 4.49% year-to-date and 4.37% over the past year. Despite the challenges posed by the bribery probe, analysts remain optimistic about Deere's long-term growth potential. The company reported a significant 16.8% drop in sales during the third quarter, but its earnings continue to attract investor interest. Deere has committed to maintaining its dividend payments and has a share buyback program in place, which may help bolster investor confidence. The company's key segments, including Production & Precision Ag, Small Ag & Turf, and Construction & Forestry, all experienced double-digit declines, raising concerns about future growth prospects. However, cost-cutting measures are anticipated to alleviate some of the financial strain, and investors are hopeful for a rebound in 2025, coinciding with expected interest rate cuts by the Federal Reserve. Technically, Deere's stock shows a bullish trend, trading above its 20, 50, and 200-day moving averages. With an average analyst price target of $426.33, there is an implied upside of 8.62%. Nevertheless, the combination of the bribery settlement and market sentiment may lead to volatility in the near term.