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what it is
Deere builds tractors, harvesters, and construction machines, then helps buyers finance them.
how it gets paid
Last year Deere & made $45.7B in revenue. Production & Precision Agriculture was the main engine at $19.8B, or 43% of sales.
why growth slowed
Revenue fell 11.7% last year. And unfortunately for deere, the backdrop is liable to remain unfavorable in fiscal 2026.
what just happened
Deere's latest quarter showed $2.42 a share, above the $2.10 estimate, while revenue reached $9.6B.
At a glance
A balance sheet — strong enough to weather a downturn
55/100 earnings predictability — expect surprises
27.9x trailing p/e — priced about right
1.4% dividend yield — cash in your pocket every quarter
12.0% return on capital — nothing to write home about
xvary composite: 59/100 — below average
What they do
Deere builds tractors, harvesters, and construction machines, then helps buyers finance them.
Deere is the largest farm-equipment maker in the world. That scale matters because 73,100 employees, dealers, and parts keep customers inside the system. Your machine needs Deere service, Deere parts, and often Deere financing, so leaving is expensive.
How they make money
$45.7B
annual revenue · their business grew -11.7% last year
Production & Precision Agriculture
$19.8B
12.0%
Small Agriculture & Turf
$10.4B
9.0%
Construction & Forestry
$12.1B
+5.0%
Financial Services
$3.4B
+2.0%
The products that matter
large-scale farm machinery
Production & Precision Agriculture
part of $45.7B total revenue
this is the flagship franchise — the big iron business inside a company that generated $45.7B last year, even after an 11.7% decline.
core business
smaller farm and turf equipment
Small Agriculture & Turf
part of $45.7B total revenue
this adds breadth beyond giant row-crop farms, but this snapshot does not break out revenue. what you know is it sits inside a $45.7B company with a 12.9% net margin.
breadth
construction and forestry machines
Construction & Forestry
part of $45.7B total revenue
this is the diversification case. it does not remove the cycle, but it means all $45.7B of revenue is not tied to one end market.
diversifier
Key numbers
$45.7B
annual revenue
That is the size of the business before the cycle took 11.7% out of sales.
27.9x
last year's profit
You are paying 27.9 years of trailing earnings for a cyclical equipment maker.
28.0%
operating margin
Every $100 of sales leaves $28 before interest and taxes, which is rich for machinery.
1.4%
dividend yield
You get $1.40 a year for every $100 you own, so most of the return depends on the stock price.
Financial health
A
strength
- balance sheet grade A — very strong financial position
- risk rank 3 — safer than 50% of stocks
- price stability 70 / 100
- long-term debt $43.5B (24% of capital)
- net profit margin 14.5% — keeps 14 cents of every dollar in revenue
- return on equity 24% — $0.24 profit for every $1 investors have put in
A — among the top-rated companies for balance sheet quality.
Total return vs. market
You invested $10,000 in DE 3 years ago → it's now worth $12,790.
The index would have given you $14,770.
source: institutional data · total return
What just happened
beat estimates
Deere's latest quarter showed $2.42 a share, above the $2.10 estimate, while revenue reached $9.6B.
Revenue rose 13% from a year ago, but the bigger picture is still a downcycle. Annual revenue sits at $45.7B, and management is guiding 2026 net income below 2025.
$9.6B
revenue
$2.42
eps
32.8%
gross margin
the number that mattered
EPS beat by $0.32, or 15.2%, which is a clean quarter in a messy cycle.
-
deere remains in a cyclical downturn.fiscal year 2025 (ended october 31st) was marked by challenges, many of which were outside the company’s control.
-
weak crop markets and tariffs encouraged farmers to take a wait-and-see approach.
-
and unfortunately for deere, the backdrop is liable to remain unfavorable in fiscal 2026.
-
after recording $5.027 billion in 2025, management expects net income to be in a range of $4.0 billion to $4.75 billion (including approximately $1.2 billion in estimated pretax direct tariff expense) this year.
-
to make things worse, the likelihood that a greater portion of business will be generated outside of the u.s. suggests taxes will be relatively higher (potentially in the 25%-27% vicinity.) altogether, these factors imply earnings of $16.00 per share are likely.in our initial view into fiscal 2027, falling used inventories in north america, stabilizing interest rates in europe, and elevated infrastructure spending globally suggest a strong earnings recovery is probable.
source: company earnings report, 2026
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What could go wrong
the #1 risk is farm income weakness and tariff-driven equipment deferrals.
high
crop prices stay weak, and farmers keep delaying purchases
Deere sells expensive equipment into a customer base that depends on farm profitability. when crop economics tighten, big-ticket orders are the first thing to get pushed out.
this pressures the whole $45.7B revenue base, not just one product line.
high
tariffs hit harder than planned
management already included about $1.2B of estimated pretax direct tariff expense in its outlook. if policy gets worse, the guide gets tighter.
the difference between $5.027B in 2025 net income and $4.0B–$4.75B in 2026 already shows the pressure.
med
the valuation leaves less room for a bad cycle
at 27.9x trailing earnings and a $516 stock price versus a $478 midpoint target, you are not buying a distressed cyclical. you are buying a respected one at a respected price.
if earnings fall toward the $16.00 estimate and recovery gets delayed, the multiple has room to compress.
a weaker farm cycle plus tariff costs would hit earnings from both sides: softer demand on the top line and as much as $1.2B of pretax expense on the cost side.
source: institutional data · regulatory filings · risk analysis
Pay attention to
earnings
next earnings guide
watch whether management keeps the $4.0B–$4.75B net income range intact or cuts it again.
metric
full-year EPS path
$16.00 is the current earnings estimate. that is the number the stock has to absorb.
risk
tariff expense
the company already flagged roughly $1.2B in pretax tariff cost. if that grows, the downside case gets easier to see.
trend
signs of a 2027 recovery
falling used inventories, stabilizing rates in europe, and global infrastructure spending are the breadcrumbs for the rebound story.
Analyst rankings
short-term outlook
below average
momentum score 4. in human-speak, analysts think this stock has a harder path over the next 6–12 months.
risk profile
average
stability score 3 means the risk profile is ordinary for a stock like this — not a bunker, not a disaster.
chart momentum
average
technical score 3 says the chart is not giving you a strong directional edge right now.
earnings predictability
55 / 100
predictability at 55/100 means earnings are only moderately reliable. in a cyclical downturn, expect noise.
source: institutional data
Institutional activity
970 buyers vs. 1,074 sellers in 3q2025. total institutional holdings: 0.2B shares.
source: institutional data
Price targets
3-5 year target range
$335
$621
$517
current price
$478
target midpoint · 7% from current · 3-5yr high: $685 (+35% · 9% ann'l return)
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