Key Stats for Deere Stock
- Price Change for Deere stock: -5.7%
- $DE Share Price as of Nov. 26: $470
- 52-Week High: $534
- $DE Stock Price Target: $525
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What Happened?
Deere (DE) stock fell on Wednesday even as the agricultural and construction equipment maker beat Wall Street’s expectations for its fiscal fourth quarter. The culprit was weak fiscal 2026 guidance, reflecting ongoing struggles in the large agricultural market and mounting tariff pressures.
Deere reported fourth-quarter earnings per share of $3.93, with revenue climbing 14% to $10.6 billion, above estimates of $3.81 and $9.81 billion, respectively.
The Production & Precision Agriculture division posted sales up 10% to $4.74 billion, Small Agriculture & Turf grew 7% to $2.46 billion, and Construction & Forestry surged 27% to $3.38 billion.
However, Deere’s fiscal 2026 outlook disappointed investors as it forecast net income between $4.00 billion and $4.75 billion, well below the $5.19 billion consensus estimate.
Management forecasts Production & Precision Agriculture sales will decline 5% to 10%, though both Small Agriculture & Turf and Construction & Forestry are expected to grow about 10%.
CEO John May acknowledged the challenges ahead, noting that “ongoing margin pressures from tariffs and persistent challenges in the large ag sector remain.”
However, he expressed cautious optimism, stating management believes “2026 will mark the bottom of the large ag cycle.”
The company is bracing for approximately $1.2 billion in direct pretax tariff expenses in fiscal 2026, up from about $600 million in fiscal 2025.
The North American large agriculture industry is expected to decline 15% to 20% as row crop farmers face challenging fundamentals, pressuring short-term liquidity and elevated used equipment inventories that constrain new machinery purchases.
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What the Market Is Telling Us About Deere Stock
The decline in Deere stock reflects investor concern about the depth and duration of the agricultural equipment downturn, even as management works to position 2026 as the bottom of the cycle.
Despite the headwinds, the company emphasized several structural improvements that are helping maintain profitability well above previous cycle troughs.
For full-year fiscal 2025, Deere delivered equipment operations margins of 12.6% and over $5 billion in net income—performance that exceeded 2016 results by over 450 basis points despite North American large ag declining about 30% this year.
Excluding tariff impacts, that margin improvement would have exceeded 600 basis points, demonstrating Deere’s progress in diversifying profitability across geographies and business segments.
Management highlighted positive momentum in reducing used equipment inventory, a critical factor for the market’s eventual recovery.
- Late-model, high-horsepower tractor inventory has declined roughly 7% since peaking in March 2025, with model-year 2022 and 2023 Deere 8R tractors down about 25% from their spring peak.
- Used combine inventory has fallen nearly 25% from spring 2024 highs, with model year distribution returning to near-normal levels.
Looking ahead, several factors could support stabilization in large agriculture. U.S. corn demand remains robust with projected exports reaching all-time highs, up 9% from the previous year.
Ethanol production is approaching record levels, supported by recent trade deals. The EPA’s proposed renewable fuel standards for 2026-2027 include substantially higher targets for biomass-based diesel, while U.S. government support for farmers is expected to exceed $40 billion in 2025.
Management also emphasized the company’s accelerating technology momentum, with base-precision solutions such as JD Link Boost and Precision Essentials driving strong adoption.
The recently announced autonomous tillage solution is now taking spring delivery orders, while See & Spray technology covered over 5 million acres in 2025 with average herbicide savings of around 50%.
Deere stock slid on cautious 2026 guidance despite solid Q4 execution and structural margin improvements.
Investors appear focused on near-term earnings pressure from tariffs and the large ag downturn rather than management’s confidence in reaching the cycle bottom and emerging stronger through diversification and technology leadership.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
