DE
T3Deere & Company
OverviewDeere & Company manufactures and distributes agricultural, construction, and forestry equipment globally. Its segments include Production and Precision Agricult
Deere & Company manufactures and distributes agricultural, construction, and forestry equipment globally. Its segments include Production and Precision Agriculture (45% revenue), Small Agriculture and Turf (25%), Construction and Forestry (22%), and Financial Services (8%). The company helps farmers, contractors, and homeowners improve productivity, selling primarily through a global network of independent dealers.
- What They Do (Plain English & Analogies)
- Deere & Company, often known by its iconic John Deere brand, is like the 'Swiss Army knife' for heavy-duty work across farms, construction sites, and even your backyard. They make big green tractors and combines for farmers to plant, spray, and harvest crops with incredible precision, using advanced technology like GPS and AI to optimize yields and reduce waste. For construction, they build yellow excavators, bulldozers, and road-building equipment that are essential for everything from building new highways and bridges to preparing sites for massive data centers. They also make smaller equipment like lawnmowers and utility vehicles for homeowners and landscapers. Beyond just selling the machines, Deere is increasingly a technology company, providing the 'operating system' and software that helps these machines work smarter, more efficiently, and sometimes even autonomously, helping customers do more with less labor and resources. They also offer financing to help customers purchase their equipment.
- Very Brief History
- Founded in 1837 by blacksmith John Deere, the company began by inventing the self-scouring steel plow, which revolutionized farming. Over nearly two centuries, it evolved from a simple implement maker into a global powerhouse in agricultural machinery, then expanded into construction and forestry equipment. In the 21st century, Deere has strategically transitioned into 'Precision Ag,' acquiring technology companies like Blue River Technology and Bear Flag Robotics to integrate advanced computer vision, AI, and autonomy, leading the industry's shift towards data-driven and increasingly autonomous operations.
- "Street Stereotype"
- Deere is widely perceived on the 'Street' as a 'Cyclical Tech' hybrid. While historically traded as a pure-play on commodity prices and the agricultural cycle, investors and analysts now view it as a high-margin technology leader. It serves as a barometer for global food security and infrastructure spending, with a current focus on whether its tech-driven 'Smart Industrial' strategy can maintain high margins and decouple earnings from traditional hardware cycles, even during cyclical downturns in farm income.
- Subsidiaries On Linked In*
- Wirtgen Group — LinkedIn: wirtgen-group
- Blue River Technology — LinkedIn: blue-river-technology
- Bear Flag Robotics — LinkedIn: bear-flag-robotics
- Tenna — LinkedIn: tenna
- Kreisel Electric — LinkedIn: kreisel-electric
- PLA — LinkedIn: pla-argentina
- Mazzotti — LinkedIn: mazzotti-s-r-l
- Harvest Profit — LinkedIn: harvest-profit
- John Deere Financial — LinkedIn: john-deere-financial
- Customer Sectors & Example Clients
- Deere & Company's customers span several key sectors. In agriculture, they serve **Row Crop Farming** (e.g., corn, soy, wheat producers), **Dairy & Livestock** producers, and other crop producers globally. In construction, their clients include large-scale **Infrastructure/Road Building** firms, **Data Center Construction** companies, and **Water and Utility Contractors**. They also cater to **equipment rental giants** and **forestry operations**. While sales are primarily through a vast global dealer network, major enterprise-level users could include large construction firms like Bechtel or Fluor, equipment rental companies such as United Rentals and Sunbelt Rentals, and massive agricultural cooperatives like Land O'Lakes.
- New Customers / Segments They'Re Targeting
- Deere is actively targeting new customer segments and expanding its reach within existing markets. A significant focus is on **data center construction**, which is experiencing robust growth and driving demand for heavy earthmoving equipment. They are also expanding their presence in **road building markets** globally, supported by increased infrastructure spending. Within agriculture, they are continuously expanding their precision technology solutions to cover a broader range of crops, such as **wheat, barley, and canola**, and are making a concerted effort to introduce new products and technologies to markets like **Brazil**, aiming to capture more growth in South America.
- Supply Chain And Sourcing Geographies
- Deere & Company maintains a strong commitment to domestic manufacturing for its U.S. sales. Approximately 80% of John Deere's complete goods sold in the U.S. are produced at its U.S. manufacturing facilities. Furthermore, roughly 75% of the components used at these U.S. facilities are sourced from U.S.-based suppliers. The company continues to invest in and expand its domestic footprint, for example, with a $70 million expansion investment in Kernersville, North Carolina, to build U.S.-designed and manufactured excavators. The company also operates globally, implying a diversified supply chain for its international operations, though specific non-U.S. sourcing geographies were not detailed in the provided context.
- Sales Geographies And Expansion Plans
- Deere & Company sells its products through a vast global network of independent, third-party retail dealers. Key sales geographies mentioned include **North America** (U.S. and Canada), **Europe**, **South America** (with a specific focus on Brazil), and **Asia** (with modest improvements noted in the India market). While the company is strengthening its position and expanding its product portfolio in these existing regions, particularly in South America with significant product launches, the provided information does not explicitly detail plans to expand sales into entirely new geographic regions beyond its current global footprint.
- How Key Themes May Help/Hurt
- The 'Humanoid '25: Industrial Automation OEMs' theme is a significant tailwind for Deere & Company. Deere's 'Smart Industrial' strategy is fundamentally about industrial automation, applying AI, sensors, and robotics to agriculture and construction. The accelerating adoption of robotics and automation, driven by persistent labor shortages and efficiency demands, directly increases the value proposition and demand for Deere's precision agriculture and construction solutions. Breakthroughs in AI, such as Vision-Language-Action models, can enhance Deere's own product development, enabling more sophisticated autonomous capabilities and data-driven insights for its machinery. Cost reductions in humanoid robots and automation components, as highlighted in the theme, could potentially lower Deere's input costs for integrating advanced tech, making its high-tech solutions more competitive and accessible. This theme helps Deere by validating and accelerating its strategic shift towards becoming a high-margin technology leader, reducing its reliance on hardware cycles, and driving recurring software-like revenues from its connected fleet and digital services.
3 Main Long-Term Bull Details
- Precision Ag and SaaS-like Margins: Deere's 'Smart Industrial' strategy is driving rapid adoption of high-margin precision technology and recurring software-like revenues. With engaged acres increasing, monthly active digital users growing to nearly 440,000, and high utilization rates for solutions like See & Spray (demonstrating 50-60% herbicide savings) and Harvest Settings Automation (over 80% utilization in Brazil), the company is successfully building a sticky, high-value technology stack that provides a critical margin cushion and structurally higher performance across cycles.
- Diversified Growth Engines Offsetting Ag Trough: The Construction & Forestry (C&F) and Small Ag & Turf (SAT) segments are proving to be powerful growth engines, effectively offsetting the current trough in large agriculture. C&F is benefiting from robust infrastructure spending, accelerating data center investments, and strong rental activity, leading to increased sales guidance. SAT is capitalizing on a recovery in turf markets and healthy dairy/livestock sectors. This diversification provides increased resilience and enhanced growth opportunities for the organization, enabling the company to maintain its overall net income outlook even when large ag is challenged.
- Strong Inventory Management and Latent Replacement Demand: Deere has demonstrated exceptional discipline in managing inventory, keeping new field inventory low and making significant progress in reducing used equipment, particularly late-model high-horsepower tractors (down ~45% from peak). This lean channel positioning, combined with an aging equipment fleet (machine hours continue to accrue), is building substantial latent replacement demand. This ensures Deere is well-positioned to be the first to benefit as the agricultural cycle recovers, with expectations for a recovery in 2027.
3 Main Long-Term Bear Details
- Persistent Farm Liquidity Pressure and Input Costs: Despite recent grain price increases, customer sentiment in large agriculture remains muted due to elevated and volatile input costs (like fertilizer, exacerbated by geopolitical events) and high interest rates. This pressure on grower margins, particularly acute in regions like Brazil, could delay the anticipated recovery in equipment demand and impact purchasing decisions, posing a risk to the pace of the large ag cycle's rebound.
- Significant Tariff Headwinds: Deere continues to face a substantial direct tariff exposure, projected at approximately $1.2 billion for fiscal year 2026, which represents about a 3% margin headwind for equipment operations. While the company recognized a $272 million refund in Q2, the ongoing tariff costs, even net of refunds (approximately $900 million for the year), represent a material financial burden. The dynamic and unpredictable nature of trade policy introduces persistent uncertainty and challenges the company's ability to achieve full price-cost neutrality.
- Interest Rate Sensitivity and Competitive Pressures: Elevated interest rates continue to affect customer purchasing decisions and the cost of financing expensive equipment, acting as a drag on demand across segments. In the Construction & Forestry segment, competitive price pressures persist, with some competitors still holding high levels of field inventory, which can lead to aggressive discounting. If interest rates remain higher for longer or if competitive intensity increases, Deere's pricing power and segment growth could face headwinds.
- Competitors And Differentiation
- Deere's competitors are other global manufacturers of agricultural, construction, and forestry equipment. While specific competitor names are not listed in the transcript, the company acknowledges 'competitive price pressure' in segments like Construction & Forestry and notes that 'many competitors still hold high levels of field inventory.' Deere differentiates itself through its 'Smart Industrial' strategy, which emphasizes the integration of advanced **precision technology and automation** (e.g., See & Spray, harvest automation, autonomy-ready tractors) to deliver increased value, productivity, and efficiency for customers. They also focus on **disciplined inventory management** to maintain healthy dealer channels, **robust new product introductions** (like their proprietary excavators and expanded ag tech solutions), and leveraging their **strong global dealer network** to provide superior support and service.
- Recent Performance & What The Market'S Focused On
- Deere & Company delivered solid second-quarter fiscal 2026 results, with net sales and revenues up 5% year-over-year to $13.369 billion and net income attributable to Deere & Company at $1.773 billion. The company maintained its overall net income outlook for fiscal 2026, projecting between $4.5 billion and $5 billion. This stability was supported by strong performance in Small Ag & Turf (net sales up 16%) and Construction & Forestry (net sales up 29%), which offset a 14% decline in Production & Precision Ag sales. The quarter also benefited from a $272 million recovery for IEEPA tariff refund claims. The market is primarily focused on the anticipated bottoming of the large agricultural cycle in 2026 and the pace of its recovery in 2027, the continued strength and diversification provided by the Construction & Forestry segment (which saw its net sales guide increased to up approximately 20% for the full year), and the ongoing adoption and margin contribution from Deere's high-value precision technology solutions. Investors are also closely watching the company's ability to manage persistent inflationary pressures and the significant tariff headwinds.
- Revenue Segments And Estimated Mix
- Production and Precision Agriculture — Mix: ~45% (FY2026 Est); Source: Existing knowledge, Q2 2026 transcript; Trend: Q2 2026 net sales down 14% YoY; FY2026 net sales forecast unchanged, down 5% to 10%
- Small Agriculture and Turf — Mix: ~25% (FY2026 Est); Source: Existing knowledge, Q2 2026 transcript; Trend: Q2 2026 net sales up 16% YoY; FY2026 net sales forecast unchanged, up approximately 15%
- Construction and Forestry — Mix: ~22% (FY2026 Est); Source: Existing knowledge, Q2 2026 transcript; Trend: Q2 2026 net sales up 29% YoY; FY2026 net sales forecast increased to up approximately 20%
- Financial Services — Mix: ~8% (FY2026 Est); Source: Existing knowledge, Q2 2026 transcript; Trend: Q2 2026 net income was $190 million; FY2026 net income outlook raised to $860 million
- Product Brands
- John Deere
- Wirtgen
- Vögele
- Hamm
- Kleemann
- Benninghoven
- Exact Depth
- FurrowVision
- Exact Shot
- Exact Rate
- Senspray
- See & Scout
- Precision Essentials
- JDLink Boost
Bull / Bear DetailsAs of June 3, 2026, Deere faces significant headwinds despite a diversified portfolio. While Construction and Small Ag show strength, the Large Ag segment remai
Thesis
As of June 3, 2026, Deere faces significant headwinds despite a diversified portfolio. While Construction and Small Ag show strength, the Large Ag segment remains pressured by elevated input costs, high interest rates, and a revised downward outlook for South America. Persistent tariff expenses and muted farmer sentiment suggest a challenging environment, making the bear case more compelling despite management's expectation of a 2026 cycle bottom.
Bull case
Deere's Smart Industrial strategy continues to drive robust adoption of high-margin precision technology. Engaged acres in the Operations Center are up 10% year-over-year, with highly engaged acres growing faster, and Precision Essentials renewal rates for second-year customers exceeding 90%. This shift towards recurring, software-like revenues provides a critical margin cushion and enhances long-term profitability across cycles.
Management has demonstrated exceptional discipline in inventory management, positioning the company for a future recovery. New field inventory remains favorable, with high-horsepower tractors and combines down over 50% from their mid-2024 peak. Used inventory is also improving, down mid-teens from its cycle peak and low single digits sequentially, effectively clearing the trade ladder for new machine sales.
The Construction & Forestry segment continues to be a powerful growth engine, significantly offsetting Large Ag weakness. Net sales surged 29% year-over-year, and the full-year guidance was raised to approximately 20% growth. The order book is up over 60% since November, driven by robust infrastructure spending, rental fleet replacement, and accelerating data center construction, with nearly all new excavator production slots filled.
Bear case
Deere faces a persistent and substantial direct tariff headwind, projected at $1.2 billion for FY2026, representing a 3% margin headwind. While a $272 million refund was recognized, the net tariff cost remains approximately $900 million. Management's focus on cost mitigation rather than surcharges, combined with general inflation, implies that tariffs continue to dilute margins.
Global agricultural fundamentals remain fragile, with farmer sentiment muted by elevated and volatile input costs, particularly for fertilizer and fuel, and high interest rates. The South American industry sales outlook for tractors and combines was revised significantly downward to a 15% decline, reflecting acute pressure on grower profitability in Brazil.
Elevated interest rates continue to act as a significant drag on equipment replacement cycles and customer capital expenditure decisions, especially in the agricultural sector. While the Construction segment shows strength, the broader impact of higher-for-longer interest rates could still temper demand across segments and challenge Deere's pricing power in competitive markets.
Bull / Bear Case
- Bear Case
- Deere faces persistent pressure on farmer sentiment and liquidity due to elevated and volatile input costs, particularly for fertilizer and fuel, exacerbated by geopolitical events, and high interest rates. This could delay the anticipated recovery in large ag demand, as evidenced by the downward revision of the South American industry sales outlook to a 15% decline. Despite a recent tariff reduction, the company still faces a substantial direct tariff headwind, projected at approximately $1.2 billion for FY2026 (or ~$900 million net of refunds), which continues to dilute margins as management focuses on cost mitigation rather than surcharges. Elevated interest rates remain a significant drag on equipment replacement cycles and customer capital expenditure decisions across segments, potentially tempering demand and challenging Deere's pricing power in competitive markets.
- Bull Case
- Deere's 'Smart Industrial' strategy continues to drive robust adoption of high-margin precision technology, with engaged acres in the Operations Center up 10% year-over-year and Precision Essentials renewal rates for second-year customers exceeding 90%. This shift towards recurring, software-like revenues provides a critical margin cushion and enhances long-term profitability across cycles. The Construction & Forestry (C&F) and Small Ag & Turf (SAT) segments are powerful growth engines, with C&F net sales surging 29% year-over-year and full-year guidance raised to approximately 20% growth, driven by robust infrastructure spending and accelerating data center investments. Disciplined inventory management, with new field inventory low and used inventory significantly reduced, positions the company for a strong recovery as the aging equipment fleet drives latent replacement demand, with 2026 anticipated as the bottom of the ag cycle.
- More Compelling & Why
- Bear. Deere's current TTM P/E ratio of approximately 31-32x is significantly above its 5-year average of 18.67x and 10-year average of 19.67x, suggesting the stock is overvalued given the ongoing agricultural headwinds. The strongest bear argument is the persistent muted farmer sentiment and liquidity pressure from high input costs and interest rates, which creates uncertainty around the timing and strength of the large ag recovery. My view would flip to Bullish if Deere's P/E ratio normalized closer to its historical averages (e.g., below 25x), or if there were clear, sustained signs of improving farmer profitability and a definitive upturn in large ag equipment orders.
Key Factors
| Key Factor | Why It Matters | What To Watch | What It Signals | Where/How To Track | Free Alt Data | Paid Alt Data |
|---|---|---|---|---|---|---|
| North American Used High-Horsepower Tractor Inventory Sequential Decline Rate | A slowing sequential decline in used inventory, especially during periods typically seeing seasonal builds, indicates that the trade ladder for new equipment sales is not clearing as rapidly as needed, potentially delaying the ag cycle recovery. | Monitor monthly sequential changes in North American used inventory for high-horsepower tractors. Specifically, watch if the sequential decline rate falls below 'low single digits' or if inventory levels flatten/increase in upcoming quarters. | If North American used high-horsepower tractor inventory shows a sequential decline of less than 'low single digits' or an increase in Q3 2026 = Bearish (indicates used supply continues to cannibalize new sales and slows the pace of market recovery). | Deere & Company earnings calls and investor presentations (management commentary on inventory trends). AEM retail sales data (indirectly). | Industry dealer surveys (e.g., from farm equipment associations). Agricultural news outlets reporting on used equipment market conditions. | EquipmentWatch: Used equipment inventory and pricing data. |
| Production & Precision Ag (PPA) Full-Year Price Realization Expectation | A downward adjustment to the full-year PPA price realization indicates Deere's inability to fully pass on costs or tariffs, directly impacting segment margins and overall profitability, especially in a key segment. | Monitor future Deere & Company earnings reports for the full-year price realization forecast for the Production & Precision Ag segment. Specifically, watch if it is revised further down from the current '1 point' (1%) expectation. | If the full-year PPA price realization forecast is revised further down from '1 point' (1%) = Bearish (signals increasing pricing pressure and erosion of structural margins in a high-value segment). | Deere & Company earnings calls and investor presentations. Next update expected in Q3 2026 earnings. | Industry reports on agricultural equipment pricing trends from organizations like AEM (Association of Equipment Manufacturers). Competitor earnings calls for pricing commentary. | Bloomberg Terminal: Industry pricing surveys for agricultural machinery. |
| Farmer Sentiment and Volatility of Input Costs (Fertilizer, Fuel) | Muted farmer sentiment and volatile, elevated input costs directly pressure grower margins, leading to delayed purchasing decisions for new equipment and impacting overall demand for agricultural machinery. | Monitor agricultural commodity prices (corn, soybeans), fertilizer and fuel prices, and reports on farmer profitability expectations. Watch for sustained increases in input costs without corresponding commodity price gains. | If farmer sentiment remains muted or deteriorates further, coupled with continued elevated and volatile input costs (e.g., fertilizer prices increase by >10% sequentially without proportional commodity price increases) = Bearish (signals continued pressure on equipment demand and potential for further order softness). | USDA reports (e.g., WASDE, Farm Income Forecast), agricultural news outlets (e.g., Successful Farming, AgWeb), commodity market data. | USDA Economic Research Service: Farm income and expense data. CME Group: Futures prices for agricultural commodities, fertilizer, and crude oil. Google Trends: 'fertilizer prices', 'farm income outlook'. | Gro Intelligence: Global agricultural supply, demand, and price data. |
| South American Ag Industry Sales Outlook Revision | A significant downward revision in the South American ag industry sales outlook directly impacts Deere's revenue and profitability in a key growth region, signaling worsening market conditions for farmers and potential for further demand weakness. | Monitor subsequent Deere & Company earnings calls and investor presentations for any further downward revisions to the South American ag industry sales forecast from the current 'down 15%' projection. | If the South American ag industry sales forecast is revised further down from 'down 15%' = Bearish (indicates deeper and prolonged market weakness, impacting Deere's regional sales and profitability). | Deere & Company earnings calls and investor presentations. Next update expected in Q3 2026 earnings. | Brazilian government agricultural reports (e.g., CONAB, IBGE) on crop production, input costs, and farmer profitability. News from major agricultural publications focusing on Brazil. | IHS Markit: Agricultural machinery market forecasts for South America. |
| Net Tariff Costs and Effectiveness of Mitigation Strategies | Despite a one-time refund, the ongoing $1.2 billion direct tariff exposure remains a significant margin headwind. The effectiveness of mitigation strategies through cost actions is crucial for maintaining profitability. | Monitor management commentary on the effectiveness of tariff mitigation strategies (resourcing, reshoring, exemptions) and any changes to the projected full-year net tariff cost (currently approximately $900 million after refunds). | If management indicates that tariff mitigation efforts are proving less effective than anticipated, or if the net full-year tariff cost forecast increases above $900 million = Bearish (signals persistent margin pressure and inability to offset trade-related headwinds). | Deere & Company earnings calls and investor presentations. Next update expected in Q3 2026 earnings. | U.S. Customs and Border Protection (CBP) announcements on tariff policies. Trade news from government sources (e.g., USTR). Company press releases on manufacturing investments or supply chain changes. | Panjiva: Supply chain data to track sourcing changes and reshoring efforts. |
Key Reported Metrics
| Metric | Why It Matters | Last Period |
|---|---|---|
| Production & Precision Ag Net Sales | This metric is the primary indicator of the global agricultural cycle. Investors are watching for stabilization and the impact of precision technology adoption to provide a margin cushion, especially as 2026 is expected to be the bottom of the ag cycle. | down 14% |
| Construction & Forestry Net Sales | C&F is Deere's strongest growth engine, offsetting Large Ag weakness. Investors will watch if infrastructure and data center demand are resilient enough to sustain double-digit growth, validating the segment's increased sales guidance. | 29% |
| Equipment Operations Net Sales | This aggregate metric tracks the success of the 'Smart Industrial' strategy across all hardware segments. The market will watch if Deere can maintain mid-single-digit growth for the full year while navigating significant tariff headwinds. | 5% |
Key QuestionsWill the reported "low single digits" sequential decline in North American used high-horsepower tractor inventory be sufficient to prevent a renewed build-up in
Will the reported "low single digits" sequential decline in North American used high-horsepower tractor inventory be sufficient to prevent a renewed build-up in the upcoming quarter, or will muted farmer sentiment and high input costs lead to a reversal, prolonging the Large Ag downturn beyond 2026?
- Question 2
Given the "margin dilutive" impact of tariffs and the downward adjustment to Production & Precision Ag's full-year price realization, will Deere's mitigation strategies be insufficient to prevent further margin compression in the face of persistent input cost inflation over the next quarter?
- Question 3
Despite strong current performance and order book growth, will the Construction & Forestry segment's momentum be tempered by a slowdown in infrastructure spending or data center investments, or by increased competitive pressures, thereby reducing its ability to durably offset the ongoing weakness in Large Ag?
Rerating Thresholds
| Metric | What'S Needed For Rerating | Why It Matters | Earnings Date |
|---|---|---|---|
| Worldwide Net Income | To trigger a higher rerating, Worldwide Net Income must narrow its year-over-year decline from -47% to a range of -10% to +5% (effectively flat). Specifically, Deere needs to report quarterly results that support an upward revision of its FY2026 net income guidance from the current $4.0B–$4.75B range toward a $5.5B–$6.0B floor. This must be achieved by beating consensus estimates by at least 8-10% and demonstrating that the $1.2 billion tariff headwind is being fully offset by 'Smart Industrial' cost efficiencies and precision-tech pricing power, maintaining Production and Precision Ag margins above 15%. | Hitting this threshold confirms the cyclical trough is in and validates Deere's transition to a high-margin tech company. It proves the 'Smart Industrial' strategy can decouple earnings from hardware cycles, justifying a higher P/E multiple as investors shift from 'recessionary' pricing to valuing the next upcycle's software-driven margin expansion. | 2026-02-19 |
| Construction and Forestry Net Sales | To trigger a positive rerating, Construction and Forestry Net Sales must narrow the current -25% YoY decline to a range of -10% to -5% YoY, or ideally achieve low-single-digit positive growth (+2% to +5%). By the February 2026 earnings date, the market requires a beat of at least 300-500 basis points against consensus estimates, a book-to-bill ratio exceeding 1.0x, and FY2026 segment guidance of ~10% growth to confirm a cyclical inflection point. | This metric is the primary indicator for the end of the 'Cycle Short' thesis. Narrowing the sales decline signals a cyclical trough, allowing investors to shift from a 'recessionary' valuation to a 'recovery' multiple. It validates that infrastructure tailwinds and data center demand are successfully offsetting high interest rate pressures and agricultural weakness. | 2026-02-19 |
| Production and Precision Agriculture Net Sales | For a higher rerating, this metric needs to show the YoY decline narrowing significantly from -38% to better than -15%, with management providing FY2026 segment guidance of +5% to +8% growth. Specifically, investors are looking for a book-to-bill ratio above 1.0x and evidence that the North American large-ag dealer destocking cycle has bottomed, clearing the path for positive growth by mid-2026. The stock also requires a beat of at least 300-500 basis points against consensus estimates to prove that precision technology adoption is successfully offsetting volume declines. | Stabilizing sales in this high-margin segment signals the agricultural cycle's trough and validates Deere's 'Smart Industrial' transition. Achieving this threshold shifts the narrative from a cyclical hardware manufacturer to a structural tech leader, justifying a higher P/E multiple as recurring software and precision-ag revenues provide a superior margin cushion compared to previous downturns. | 2026-02-19 |
Earnings Transcript Summary
· 2026Q2 Earnings Call
| 3 Things Management Is Most Focused On | Call Takeaway & Tone | Prior Quarter'S Y/Y Growth By Segment | 3 Things Analysts Most Pressed On (And Mgmt Responses) | Revenue Segments |
|---|---|---|---|---|
| 1. **Maintaining financial expectations and leveraging business diversification**: Management emphasized delivering 5% year-over-year net sales growth and a 16.9% equipment operations margin, maintaining the overall net income outlook for fiscal 2026, and progressing towards 2030 LEAP ambitions. They highlighted the resilience provided by all three operating segments being at different points in the cycle. 2. **Strengthening Large Ag for cycle recovery and inventory management**: Management is focused on maintaining low levels of new field inventory, continuing to improve used inventory, and introducing robust new products and technology solutions to drive market share gains and enable future growth as large Ag markets recover, anticipating 2026 as the bottom of the ag cycle. 3. **Delivering structurally higher performance and investing in customer value-generating solutions**: Management is committed to sustained record investment across cycles to make value-generating solutions a reality for customers, helping them "do more with less" and supporting them efficiently and profitably. They noted structurally improved profitability compared to the last cycle trough. | Deere & Company delivered solid second-quarter results, with net sales and revenues up 5% year-over-year, supported by strong performance in Construction & Forestry and Small Ag & Turf, which offset the ongoing pressures in Large Ag. The company maintained its full-year net income outlook, benefiting from a one-time tariff refund and disciplined inventory management. Management emphasized the resilience of its diversified portfolio and continued investment in precision agriculture and technology solutions to drive future growth and structurally higher performance. The tone was confident and resilient, acknowledging the dynamic and challenging market environment, particularly in large Ag and geopolitical factors, but expressing strong confidence in the company's strategic execution, diversified business model, and long-term growth prospects, especially with the anticipated bottoming of the ag cycle in 2026. | In the prior quarter (2026Q1), Production & Precision Ag net sales grew +3% y/y. Small Ag & Turf net sales grew +24% y/y. Construction & Forestry net sales grew +34% y/y. Financial Services net income was up 14.5% y/y. | 1. **Construction & Forestry growth and market share**: Analysts questioned the significant gap between Deere's C&F sales growth (29%) and the industry forecast (up 5%), asking if Deere was gaining a lot of share. Management responded that the growth was due to underproduction in the prior year, the overall industry lift, and some market share gains over the past 12 months, particularly in the last six, due to pricing adjustments. 2. **Tariff impact and mitigation strategies**: Analysts sought clarification on the $272 million tariff refund and how it affects the $1.2 billion full-year tariff exposure, as well as Deere's mitigation strategies given they are not surcharging customers. Management explained that the $1.2 billion run rate for tariff expense remains unchanged, and the $272 million was a new refund. They are focusing on reducing exposure through cost actions like resourcing, reshoring, and exemption submissions, aiming to largely counter the negative financial impact through cost measures. 3. **Global Ag cycle and downside risk**: Analysts inquired about the broader global ag cycle, particularly the downside risks given the geopolitical environment, and historical farmer behavior during such times. Management reiterated their baseline expectation of a recovery in 2027, driven by an aging fleet and improved used inventory levels. They acknowledged current pressures on farmer margins from elevated input costs, especially in Brazil, but noted that North American and European farmers largely secured inputs earlier and commodity prices have improved. | Net sales and revenues were up 5% to $13.369 billion. Net sales for equipment operations were up 5% to $11.778 billion. Production and Precision Ag net sales were down 14% to $4.503 billion. Small Ag and Turf net sales increased 16% to $3.485 billion. Construction & Forestry net sales increased by 29% to $3.79 billion. Worldwide financial services net income attributable to Deere & Company was $190 million, representing a year-over-year increase. |
· 2026Q1 Earnings Call
| 3 Things Management Is Most Focused On | Call Takeaway & Tone | Prior Quarter'S Y/Y Growth By Segment | 3 Things Analysts Most Pressed On (And Mgmt Responses) | Revenue Segments |
|---|---|---|---|---|
| 1. Inventory Management and Channel Health: Management is aggressively reducing used equipment inventory (late-model tractors down 20% sequentially) and keeping new field inventory at 17-year lows to ensure a healthy trade ladder. 2. Construction & Forestry Momentum: Capitalizing on resilient demand from infrastructure spending, data centers, and the launch of the first fully Deere-designed 20-ton excavators. 3. Cycle Bottoming and Stability: Establishing 2026 as the structural floor for the agricultural cycle, supported by government bridge programs and stabilizing commodity trade flows. | Takeaway: Deere delivered a strong Q1 beat and raised its full-year net income guidance to $4.5B–$5.0B, signaling that the broader portfolio (Construction and Small Ag) is more than offsetting the trough in Large Ag. The company is successfully decoupling its performance from the hardware cycle through precision tech and disciplined inventory control. Tone: Confident and Resilient; management believes the market has moved past 'peak uncertainty.' | Production & Precision Ag: +10% y/y; Small Ag & Turf: +7% y/y; Construction & Forestry: +27% y/y. (Note: Growth accelerated significantly in Small Ag and Construction, but decelerated in Production & Precision Ag). | 1. Pricing Trajectory: Analysts questioned the bridge from neutral Q1 pricing in PPA to the 1.5% full-year guide. Management responded that North American price remains positive and they will lap easier comparisons from prior-year incentives in the back half. 2. Construction Order Strength: Analysts pressed on the sustainability of the 50% increase in the C&F order bank. Management cited broad-based contractor confidence, a growing infrastructure backlog, and rental refleeting as durable drivers. 3. Tariff Headwinds: Analysts asked about the $1.2B tariff projection and potential relief. Management stated they are focused on mitigation and operational efficiencies to maintain price-cost neutrality regardless of policy volatility. | Production & Precision Ag: +3% y/y; Small Ag & Turf: +24% y/y; Construction & Forestry: +34% y/y; Financial Services: Net Income of $244M (up 14.5% y/y). |
· 2025Q4 Earnings Call
| 3 Things Management Is Most Focused On | Call Takeaway & Tone | Prior Quarter'S Y/Y Growth By Segment | 3 Things Analysts Most Pressed On (And Mgmt Responses) | Revenue Segments |
|---|---|---|---|---|
| 1. Inventory and Cycle Management: Management is aggressively reducing used equipment inventory (down 7-30% across categories from peaks) and maintaining new field inventory at 17-year lows to prepare for a market inflection. 2. Technology Stack Scaling: Driving adoption of high-margin solutions like See & Spray (5M acres covered in 2025) and autonomous tillage to decouple earnings from the hardware cycle. 3. Structural Margin Resilience: Maintaining trough margins that are significantly higher than previous cycles (e.g., 450 bps better than 2016) through the 'Smart Industrial' strategy and cost-out initiatives. | Takeaway: Deere is navigating the bottom of a challenging agricultural cycle by leveraging its diversified portfolio (Small Ag and Construction are expected to grow in FY26) and structural cost improvements. While Large Ag remains subdued, management believes FY2026 will mark the cycle's floor, supported by lean inventories and accelerating tech adoption. Tone: Cautiously Resilient; management expressed high confidence in their ability to deliver structurally superior performance during a trough compared to historical downturns. | In 2025Q3, segment y/y growth was: Production and Precision Ag: -25%; Small Ag and Turf: -18%; Construction and Forestry: -13%. 2025Q4 showed a significant acceleration/rebound in year-over-year growth across all equipment segments compared to the prior quarter. | 1. Tariff Headwinds: Analysts questioned the $1.2B projected tariff expense for FY2026. Management responded that they intend to be price-cost positive by capturing incremental exposure through pricing and ongoing mitigation efforts. 2. PPA Decremental Margins: Analysts pressed on the ~60% decremental margins implied for Production & Precision Ag in FY26. Management explained this is driven by the loss of high-margin North American Large Ag volume and a negative geographic mix. 3. FY2026 Pricing Outlook: Analysts asked why the price guide was only 1.5% despite higher list prices. Management cited more muted pricing in Brazil and a higher sales mix of parts versus complete goods as the primary dilutive factors. | Production and Precision Ag: +10% y/y ($4.74B); Small Ag and Turf: +7% y/y ($2.46B); Construction and Forestry: +27% y/y ($3.38B); Financial Services: Net Income of $93M (up from $58M in 4Q24). |
Transcript Tidbits
| About Expanding Eligible Market | About Competition | About The Broader Industry | Where Things Are Headed | Updates On Theme | Broader Themes Emerging | Bullish-Leaning Quotes (Short) | Bearish-Leaning Quotes (Short) | Hiring |
|---|---|---|---|---|---|---|---|---|
| Deere is expanding its portfolio with new products and technology solutions, including 6 new ADAR and ADAR X tractor models (440, 490, 540-horsepower offerings) that are autonomy-ready and integrated with advanced precision technologies. New planting offerings like Exact Depth solution and FurrowVision technology aim to optimize furrow and downforce. Senspray technology has expanded targeted application capabilities across a broader range of crops, including wheat, barley, and canola, and new See & Scout capabilities leverage the same camera platform for agronomic insights. The company held its largest product launch ever in Brazil, Casa John Deere, introducing over 20 new product and technology solutions across both ag and construction. Connectivity solutions are expanding through a partnership with Starlink, with over 12,500 JDLink Boost kits sold and 25% growth in the last quarter. In Construction & Forestry, Deere recently started building Deere-designed excavators in Kernersville, North Carolina, following a $70 million expansion investment to bring U.S. designed and manufactured excavators to the market. | Deere's retail sales in Brazil have declined less than the broader tractor and combine industry, which saw a 15% decline in 6 months. The company continues to see year-over-year market share growth across all tractor categories in Brazil, while maintaining a strong position in combines. In the U.S. and Canada Construction & Forestry segment, Deere has seen some pickup in market share over the past 12 months, particularly in the last six, due to pricing adjustments. | The construction industry benefits from robust infrastructure spending, rental fleet replacement, and accelerating data center investments. Small ag and turf markets are recovering, with demand expanding in turf and healthy cash flow in the dairy and livestock sector. Consumption of ag commodities continues to grow, supported by increased biofuel use and higher energy prices, with potential for tighter commodity supplies due to higher fertilizer costs. However, customer sentiment remains muted due to elevated and volatile input costs and high interest rates. U.S. government programs, including higher renewable volume obligations and potential year-round E15, are providing liquidity support and future demand stability for farmers. Elevated interest rates are affecting purchasing decisions in Europe and South America. Global forestry markets are expected to decline 5% due to weak residential construction and low log and lumber prices, while global road building markets are projected to grow approximately 10%. The conflict in Iran has contributed to inflationary impacts on products like oil and fertilizer. Data center construction is expected to exceed $100 billion in 2026, with additional double-digit growth into 2027. | Deere maintained its overall net income outlook for fiscal 2026, projecting between $4.5 billion and $5 billion. The company continues to progress towards its 2030 LEAP ambitions. Management's baseline view is that 2026 will represent the bottom of the ag cycle, with recovery anticipated in 2027. Large ag equipment industry sales in the U.S. and Canada are expected to decline 15% to 20%. Small ag and turf industry demand in the U.S. and Canada is expected to remain steady, ranging from flat to up 5%. South America industry sales of tractors and combines are now expected to decline about 15%, a revision from the previous forecast of down 5%. Construction & Forestry net sales are now forecasted to be up approximately 20% for the full year, an increase from previous guidance. The company expects slightly higher revenue in the back half of the fiscal year, with the fourth quarter being higher than the third quarter, and anticipates its most favorable cost comparisons in the fourth quarter. | Industrial | AI Infrastructure (data center construction), Biofuel Policy Support (RVO, E15), and Labor Scarcity (driving demand for automation and precision technologies). | Net sales and revenues were up 5% to $13.369 billion. Construction and small ag and turf business units continue to benefit from supportive industry fundamentals. We remain confident in our ability to bring increased value to customers and deliver structurally higher performance for Deere across the cycle. The diversification of our business segments, evidenced in 2026, with all 3 operating at different points in the cycle provides increased resilience and enhanced growth opportunities. We maintained our overall net income outlook for fiscal 2026. Small ag and turf delivered margins over 20% in the quarter. Construction demand remains robust, supported by infrastructure spending, rental activity and accelerating data center investments. Our order book continues to strengthen up more than 60% since November, now at its highest level since April of 2024 with over 80% of production slots filled for the year. Nearly all of the production slots for the new John Deere excavator are spoken for at this point. Data center construction is expected to top $100 billion in 2026, with additional double-digit growth into 2027. Our new inventory levels remain favorable. Inventories for both high horsepower tractors and combines are down more than 50% from their mid-2024 peak. We expect to see recovery in 2027. We continue to see year-over-year market share growth across all tractor categories, while also maintaining our strong position in combines. We are delivering structurally higher levels of profitability compared to the last time we were at a similar point in the cycle. | Customer sentiment remains muted. Despite recent grain price increases as grower margins face headwinds from elevated and volatile input costs and high interest rates. Large ag equipment industry sales in the U.S. and Canada to decline 15% to 20%. Elevated interest rates continue to affect purchasing decisions. South America, industry sales of tractors and combines are now expected to decline about 15%. Elevated interest rates, higher input costs and a stronger Brazilian real are pressuring customer profitability and reducing equipment demand in the near term. Global forestry markets are expected to decline 5% and reflecting continued pressure from weak residential construction activity and low log and lumber prices. Our direct tariff exposure remains essentially unchanged at approximately $1.2 billion which is approximately a 3% margin headwind. Our incremental costs are a bit margin dilutive relative to price. The industry in Brazil is certainly challenged in the near term. |
| About Expanding Eligible Market | About Competition | About The Broader Industry | Where Things Are Headed | Updates On Theme | Broader Themes Emerging | Bullish-Leaning Quotes (Short) | Bearish-Leaning Quotes (Short) | Hiring |
|---|---|---|---|---|---|---|---|---|
| Deere is expanding its addressable market in Construction & Forestry (C&F) by moving into 'tasks' and 'job sites' layers, highlighted by the acquisition of Tenna to automate contractor workflows and optimize mixed fleets. The launch of the first fully Deere-designed 20-ton class excavators targets a segment representing 40% of the North American construction equipment industry. Additionally, the company is expanding precision technology into high-value crops and road building through the Wirtgen Group. | C&F pricing was slightly negative this quarter as competitive price pressures persist, though they are showing signs of easing. Management noted that many competitors still have high levels of inventory in the field, creating a lag in transaction price realization. However, Deere's inventory-to-sales ratio for combines in Brazil remains significantly lower than its competitors, and the new excavator line is expected to provide differentiation in a historically price-challenged market. | The global ag industry faces pressured producer margins despite strong production, with U.S. farm income currently supported by the $12 billion Farmer Bridge Assistance program. The U.S. equipment fleet is aging, creating latent replacement demand. The construction industry is a 'bright spot,' driven by U.S. government infrastructure spending, data center construction for AI, and strong rental demand. Biofuel policies, including E15 legislation and renewable diesel, remain key structural drivers for ag demand. | Management stated that 2026 marks the bottom of the current cycle, projecting mid-single-digit net sales growth for equipment operations. C&F net sales are forecasted to be up approximately 15% for the full year, supported by an order bank that rose 50% in the past quarter. Net income guidance was raised to a range of $4.5 billion to $5 billion, reflecting stabilization in North American large ag and growth in small ag and construction. | Industrial | AI Infrastructure: Surging data center construction is a primary driver for heavy earthmoving equipment. Government Liquidity: Federal support programs are acting as a critical bridge for farmers to manage high input costs and low commodity prices until the next cycle inflection. | "2026 marks the bottom of the current cycle."; "Our order bank has risen by over 50% in the past quarter."; "99% of the combines that were ordered this year... had some level of harvest automation."; "New field inventory... [is] about 40% lower year-over-year." | "Tariffs for the year are still projected at around $1.2 billion."; "C&F pricing was slightly negative this quarter."; "Producer margins remain pressured in many geographies."; "South America industry sales... expected to be down approximately 5%." | Mentions of 'disciplined overhead spending' and 'operational efficiencies' suggest a focus on cost control, but no specific hiring or headcount reduction targets were disclosed in the transcript. |
| About Expanding Eligible Market | About Competition | About The Broader Industry | Where Things Are Headed | Updates On Theme | Broader Themes Emerging | Bullish-Leaning Quotes (Short) | Bearish-Leaning Quotes (Short) | Hiring |
|---|---|---|---|---|---|---|---|---|
| Deere is expanding its addressable market through 'Precision Essentials' retrofit kits, which bring precision technology to the installed base of both Deere and non-Deere equipment (3,300 new organizations added). The company is also leveraging its autonomy tech stack beyond row crops into commercial mowing, orchards, and quarry operations. Connectivity is being expanded via 'JDLink Boost' (Starlink-enabled) for areas with poor cellular coverage, with 8,000 orders taken globally. Additionally, the John Deere Operations Center has been expanded into road building, earthmoving, golf, and turf segments. | The Construction and Forestry (C&F) segment faced 'increased competitive price pressure' in 2025, leading to negative price realization of about 1% in Q4 due to additional incentives to support retail activity. In the Large Ag segment, Deere is utilizing 'pooled funds' and targeted programs to help dealers manage the 'trade ladder' and reduce used inventory levels, which remains a competitive constraint for new machinery sales. | The North American Large Ag industry is expected to be down 15-20% in 2026 as row crop farmers face challenging fundamentals and liquidity pressure. Conversely, Small Ag and Turf are expected to be flat to up 5%, supported by strong dairy/livestock margins and a modest recovery in the housing market. A significant structural shift is occurring in biofuel demand, with U.S. soybean crush and corn-for-ethanol use approaching record levels, supported by renewable fuel policies and the expansion of E15 sales. | Management believes FY2026 will mark the 'bottom of the cycle' for North American Large Ag. The company is planning 'lean production' for Q1 2026 to avoid oversupply, with flexibility to ramp up as demand inflects. Net income for FY2026 is forecasted between $4 billion and $4.75 billion. Deere expects to resume normal capital allocation activities, including share repurchases, in 2026. An Investor Day on December 8, 2025, will outline the next five years of the 'Smart Industrial' strategy. | Nearshoring: | Biofuel Policy: Significant tailwinds from the 'One Big Beautiful bill' (Clean Fuel Production Tax Credit) and E15 expansion. Infrastructure & Data Centers: Surging data center construction starts and government infrastructure spending are bolstering the Construction segment. Labor Scarcity: A global driver pushing the adoption of autonomous tillage and harvest automation across all production systems. | "We believe this coming year will mark the bottom of the cycle."; "New field inventory... ended fiscal 2025 at the lowest unit level we've seen in over seventeen years."; "We expect to resume our normal capital allocation activities in 2026."; "Our performance yielded $18.5 earnings per share that supported continued strong cash generation." | "Projected pretax direct tariff expense of approximately $1.2 billion."; "Row crop farmers continue to face challenging farm fundamentals, which are pressuring short-term liquidity."; "Used equipment... remains a constraint to investments in new machinery."; "Margins will be significantly lower in the low single digits [for PPA in Q1]." |
Earnings ResultsThe company missed the rerating target as the quarterly net income decline actually widened to over 60% compared to the prior quarter's 47% decline. While manag
| Metric | Prior Quarter | Rerating Trigger | Actual Reported | Hit Target? | Notes |
|---|---|---|---|---|---|
| Worldwide Net Income | -47% YoY | To trigger a higher rerating, Worldwide Net Income must narrow its year-over-year decline from -47% to a range of -10% to +5% (effectively flat). Specifically, Deere needs to report quarterly results that support an upward revision of its FY2026 net income guidance from the current $4.0B–$4.75B range toward a $5.5B–$6.0B floor. This must be achieved by beating consensus estimates by at least 8-10% and demonstrating that the $1.2 billion tariff headwind is being fully offset by 'Smart Industrial' cost efficiencies and precision-tech pricing power, maintaining Production and Precision Ag margins above 15%. | $656 million (~62.5% y/y decline); FY2026 guidance raised to $4.5B–$5.0B | No | The company missed the rerating target as the quarterly net income decline actually widened to over 60% compared to the prior quarter's 47% decline. While management raised the full-year net income guidance, the new range ($4.5B-$5.0B) remains significantly below the $5.5B-$6.0B floor required for a rerating. The $1.2 billion tariff headwind continues to be a primary drag on bottom-line recovery. |
| Construction and Forestry Net Sales | -25% YoY | To trigger a positive rerating, Construction and Forestry Net Sales must narrow the current -25% YoY decline to a range of -10% to -5% YoY, or ideally achieve low-single-digit positive growth (+2% to +5%). By the February 2026 earnings date, the market requires a beat of at least 300-500 basis points against consensus estimates, a book-to-bill ratio exceeding 1.0x, and FY2026 segment guidance of ~10% growth to confirm a cyclical inflection point. | $2.67 billion (34% y/y growth); FY2026 guidance raised to ~15% growth | Yes | This metric significantly outperformed the rerating trigger. The segment shifted from a 25% decline to 34% growth, driven by infrastructure spending and data center demand. Management also raised full-year guidance to 15% growth, exceeding the 10% threshold. The 50% increase in the order bank provides strong visibility for the second half of the year. |
| Production and Precision Agriculture Net Sales | -38% YoY | For a higher rerating, this metric needs to show the YoY decline narrowing significantly from -38% to better than -15%, with management providing FY2026 segment guidance of +5% to +8% growth. Specifically, investors are looking for a book-to-bill ratio above 1.0x and evidence that the North American large-ag dealer destocking cycle has bottomed, clearing the path for positive growth by mid-2026. The stock also requires a beat of at least 300-500 basis points against consensus estimates to prove that precision technology adoption is successfully offsetting volume declines. | $3.163 billion (3% y/y growth); FY2026 guidance maintained at -5% to -10% | Partially | The quarterly performance was much stronger than the trigger's requirement, swinging from a 38% decline to 3% growth. However, management maintained the full-year guidance of a 5% to 10% decline, missing the +5% to +8% growth target required for a rerating. This caution is attributed to softening in the South American market, even as North American large ag shows signs of stabilizing. |
Notes
| Date | Comment | Comment Type | Comment Sentiment | Link | IS CHANGE | Price Reaction |
|---|---|---|---|---|---|---|
| 2026-05-21 | Deere's Q2 2026 earnings beat revenue and EPS estimates, driven by strong Construction & Forestry and Small Ag & Turf growth, offsetting Production and Precision Agriculture declines. Management maintained full-year guidance, emphasizing portfolio diversification and a projected 2026 ag cycle bottom. The market initially dipped on ag weakness but rebounded, reflecting confidence in Deere's diversified strategy despite persistent agricultural headwinds. | Earnings Transcript | Neutral | False | N/A |
Upcoming Events
| Catalyst ID | Estimated Timing | Estimated Date Start | Estimated Date End | Catalyst | Why It Matters | Ticker Or Theme Specific | Transcript Date | Source Type |
|---|---|---|---|---|---|---|---|---|
| DE_440c2c07 | At the end of this month | 2026-02-26 | 2026-02-28 | Commodity Classic Product Launches | Management plans to launch several major products and updates to advanced technology solutions. Successful adoption of these technologies is critical to Deere's 'Smart Industrial' strategy and maintaining high margins during the agricultural cycle trough. | Ticker | 2026-02-19 | |
| DE_b8e7b52e | Upcoming CONEXPO show in Las Vegas | 2026-03-03 | 2026-03-07 | CONEXPO-CON/AGG 2026 Product Launches | Deere will debut 24 products, including its first fully in-house designed 20-ton class excavators built in North Carolina. This marks a major strategic shift away from its previous joint venture with Hitachi and is a key driver for the Construction & Forestry segment's long-term margin goals. | Ticker | 2026-02-19 | |
| DE_ae36a2b4 | Second and third quarters | 2026-02-01 | 2026-07-31 | Brazil Combine Inventory Underproduction | Management will intentionally underproduce retail demand for combines in Brazil to correct elevated inventory levels. This will likely act as a headwind to Production & Precision Ag segment volumes and margins in the short term but is necessary for channel health. | Ticker | 2026-02-19 | |
| DE_9846dca2 | Back half of the year | 2026-05-01 | 2026-10-31 | North American Large Tractor Production Increase | Deere is increasing build rates for large tractors in the second half of fiscal 2026 due to strengthening order books. This suggests a potential bottoming of the North American large ag cycle and should improve factory overhead absorption and segment margins. | Ticker | 2026-02-19 | |
| DE_9585623d | Opportunity around the RVO and what that might mean for 2026 and 2027 | 2026-04-01 | 2026-12-31 | Renewable Volume Obligation (RVO) and E15 Policy Decisions | Proposed government policy actions regarding biofuels provide potential tailwinds for crop demand. Favorable RVO levels or E15 expansion would support corn and soybean prices, directly improving farmer liquidity and equipment demand. | Industry/Macro | 2026-02-19 | |
| DE_66afc41a | Coming up at the end of the year | 2026-10-01 | 2026-10-31 | Brazilian Presidential Election | Political uncertainty surrounding the election is currently causing caution among Brazilian producers. The outcome could impact agricultural subsidies, currency stability (the Real), and overall equipment demand in one of Deere's most important global markets. | Industry/Macro | 2026-02-19 | |
| DE_c71c9d39 | We'll see what happens on the Supreme Court side | 2026-04-01 | 2026-06-30 | Supreme Court Ruling on IEPA Tariffs | IEPA-related tariffs represent nearly half of Deere's projected $1.2 billion tariff headwind for 2026. A favorable ruling could significantly reduce the company's production costs and provide an immediate boost to operating margins. | Industry/Macro | 2026-02-19 | |
| DE_905fea43 | In 2026 | 2026-02-19 | 2026-10-31 | Resumption of Share Repurchases | Management indicated they expect to resume normal capital allocation activities, including share buybacks, this fiscal year. This signals confidence that the company has passed the point of peak cyclical uncertainty and supports EPS growth. | Ticker | 2026-02-19 | |
| DE_edbff1bb | run through the end of August (sprayers), running through the end of September (planters) | 2026-05-01 | 2026-09-30 | Outcome of the Early Order Programs (EOPs) for Model Year 2027 spring products (sprayers, planters). | EOP results provide the first concrete indication of farmer sentiment and demand for new large ag equipment for the upcoming fiscal year (2027), influencing production plans and validating the expected ag cycle recovery. Strong EOPs would be bullish, weak EOPs bearish. | Ticker | 2026-05-21 | earnings_transcript |
| DE_a55e591e | recovery in 2027 | 2026-11-01 | 2027-10-31 | Confirmation of the large agricultural cycle recovery. | A recovery in the large ag cycle would significantly boost sales and profitability for Deere's Production and Precision Ag segment, which is currently operating below trough levels. Conversely, a delayed recovery would negatively impact results and investor sentiment. | Ticker | 2026-05-21 | earnings_transcript |
| DE_fd7eaea1 | over the coming periods | 2026-06-03 | 2027-06-03 | Effectiveness of Deere's tariff mitigation strategies (resourcing, reshoring, exemption submissions, USMCA compliance, cost reductions). | Successful mitigation would help Deere maintain or improve margins despite the $1.2 billion tariff headwind. Failure to effectively mitigate could lead to margin compression and negatively impact profitability. | Ticker | 2026-05-21 | earnings_transcript |
| DE_6662a6c0 | through the remainder of the fiscal year | 2026-06-03 | 2026-10-31 | Stabilization and potential recovery of the South American (Brazilian) agricultural market. | The South American market is currently experiencing significant headwinds. Stabilization and recovery would alleviate pressure on Deere's sales in the region and contribute to overall large ag performance. Continued caution or further deterioration would negatively impact regional sales and profitability. | Ticker | 2026-05-21 | earnings_transcript |
| DE_0e0c090b | extend into 2027 | 2026-11-01 | 2027-10-31 | Continued robust demand for Construction & Forestry equipment extending into fiscal year 2027. | Sustained strong demand in C&F would continue to offset weakness in large ag, providing resilience and growth for Deere's overall business. A failure to extend demand could negatively impact the segment's performance. | Ticker | 2026-05-21 | earnings_transcript |
| DE_be3782cf | back half with the fourth quarter being higher than the third quarter | 2026-05-01 | 2026-10-31 | Realization of improved price-cost ratios and better overhead absorption in the second half of fiscal year 2026. | Improved price-cost dynamics and production efficiency are crucial for maintaining or expanding equipment operations margins, especially given ongoing inflationary pressures and tariff headwinds. Failure to achieve this improvement would negatively impact profitability. | Ticker | 2026-05-21 | earnings_transcript |