Deere (DE) AI Stock Analysis

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Deere

(NYSE:DE)

Select Model

Neutral 68 (OpenAI - 5.2)

Rating:68Neutral

Price Target:

$722.00

▲(9.06% Upside)

The score is driven by solid profitability and guidance upgrades with strengthening order books, supported by strong technical trend signals. Offsetting these positives are balance-sheet leverage and weaker cash conversion, plus a demanding valuation and meaningful tariff/large-ag cycle headwinds.

Positive Factors

Diversified products & digital investments

Deere's combination of machinery, services and software (completed Tenna acquisition and new product launches) broadens revenue streams. Digital fleet/jobsite capabilities and new equipment increase aftermarket and recurring-service potential, improving resilience across cycles and customer retention.

Strong profit margins

Sustained gross and net margins reflect durable pricing power and cost control across its equipment portfolio. Strong margins support reinvestment, R&D and shareholder returns, and provide a buffer against cyclical revenue swings common in heavy equipment industries.

Improving order books and raised guidance

A materially stronger order backlog (notably C&F +50%) and management's upward revisions to equipment-ops cash-flow guidance increase visibility into forward shipments and revenue. This supports sustained production planning, margin recovery and steadier cash generation over coming quarters.

Negative Factors

Elevated leverage

Annual leverage near 2.5–2.9x raises balance-sheet risk in a downturn. High leverage limits financial flexibility for capex, buybacks or acquisitions, increases interest sensitivity, and can force defensive cash preservation if end-market demand softens.

Weak cash conversion

FFO-to-profit conversion near 43% indicates working-capital needs or capital intensity constrain realized cash. Variable cash conversion makes deleveraging, consistent buybacks or accelerated investment harder, particularly if earnings normalize from recent peaks.

Tariff & cyclical demand risk

Material tariff exposure (~$1.2B) and ongoing large-ag industry weakness depress margins and add policy-driven cost uncertainty. Trade or tariff shifts can persistently raise production costs, compress pricing flexibility and exacerbate demand cyclicality in key markets.

Deere (DE) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$160.82B

Dividend Yield1.34%

Average Volume (3M)1.46M

Price to Earnings (P/E)33.5

Beta (1Y)0.72

Revenue Growth-11.66%

EPS Growth-27.80%

CountryUS

Employees35,200

SectorIndustrials

Sector Strength72

IndustryAgricultural - Machinery

Share Statistics

EPS (TTM)2.42

Shares Outstanding271,074,460

10 Day Avg. Volume1,729,664

30 Day Avg. Volume1,458,162

Financial Highlights & Ratios

PEG Ratio-0.89

Price to Book (P/B)4.82

Price to Sales (P/S)2.80

P/FCF Ratio38.73

Enterprise Value/Market Cap1.05

Enterprise Value/Revenue3.66

Enterprise Value/Gross Profit10.27

Enterprise Value/Ebitda15.40

Forecast

1Y Price Target

$596.87

Price Target Upside-9.84% Downside

Rating ConsensusModerate Buy

Number of Analyst Covering16

EPS Forecast (FY)N/A

Revenue Forecast (FY)N/A

Deere Business Overview & Revenue Model

Company DescriptionDeere & Company manufactures and distributes various equipment worldwide. The company operates through four segments: Production and Precision Agriculture, Small Agriculture and Turf, Construction and Forestry, and Financial Services. The Production and Precision Agriculture segment provides mid-size tractors, combines, cotton pickers and strippers, sugarcane harvesters, harvesting front-end equipment, sugarcane loaders, pull-behind scrapers, and tillage and seeding equipment, as well as application equipment, including sprayers and nutrient management, and soil preparation machinery for grain growers. The Small Agriculture and Turf segment offers utility tractors, and related loaders and attachments; turf and utility equipment, including riding lawn equipment, commercial mowing equipment, golf course equipment, and utility vehicles, as well as implements for mowing, tilling, snow and debris handling, aerating, residential, commercial, golf, and sports turf care applications; other outdoor power products; and hay and forage equipment. This segment also resells products from other manufacturers. It serves dairy and livestock producers, crop producers, and turf and utility customers. The Construction and Forestry segment provides a range of backhoe loaders, crawler dozers and loaders, four-wheel-drive loaders, excavators, motor graders, articulated dump trucks, landscape and skid-steer loaders, milling machines, pavers, compactors, rollers, crushers, screens, asphalt plants, log skidders, log feller bunchers, log loaders and forwarders, log harvesters, and attachments; and roadbuilding equipment. The Financial Services segment finances sales and leases agriculture and turf, and construction and forestry equipment. It also offers wholesale financing to dealers of the foregoing equipment; and extended equipment warranties, as well as finances retail revolving charge accounts. Deere & Company was founded in 1837 and is headquartered in Moline, Illinois.

How the Company Makes MoneyDeere generates revenue primarily through the sale of its machinery and equipment across its three segments. The Agriculture and Turf segment constitutes the largest share of revenue, driven by strong demand for agricultural machinery, particularly in times of favorable crop prices and increasing global agricultural productivity. The Construction and Forestry segment contributes through the sale of construction equipment such as excavators and loaders, which are influenced by infrastructure spending and economic conditions. Additionally, Deere's Financial Services segment provides financing solutions for customers purchasing its equipment, creating a steady revenue stream from interest and fees. The company also capitalizes on partnerships with technology firms to enhance its precision agriculture offerings, further driving sales and customer loyalty.

Deere Key Performance Indicators (KPIs)

Any

Revenue by Geography

Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.

Chart InsightsDeere's revenue in the United States and Western Europe has shown a downward trend recently, reflecting broader challenges in large agricultural equipment sales. However, the earnings call highlights growth in the Construction and Forestry segment, which could offset these declines. The company anticipates a 10% increase in net sales for Small Ag and Turf, driven by favorable margins in dairy and livestock, and robust demand for earthmoving equipment. Despite tariff impacts, Deere's strategic focus on pricing and operational efficiencies aims to sustain profitability.

Data provided by:

The Fly

Deere Earnings Call Summary

Earnings Call Date:Feb 19, 2026

(Q1-2026)

% Change Since: |

Next Earnings Date:May 21, 2026

Earnings Call Sentiment Positive

The call highlighted solid top-line growth, stronger-than-expected shipment volumes and improving order books across key segments (notably Small Ag & Turf and Construction & Forestry). Management raised guidance in several areas (segment net sales and cash flow) and emphasized operational discipline, improved used-inventory trends, product and digital investments (Tenna, new excavators) and continued shareholder returns. Offsetting factors include persistent tariff headwinds (~$1.2B), ongoing weakness in the large ag industry (U.S./Canada down 15%–20%), softness in South America and some pricing/mix pressures that weighed on PPA margins. Overall, the positive operational execution, upgraded guidance in multiple segments, and improving market indicators outweigh the documented challenges.

Q1-2026 Updates

Positive Updates

Top-line Growth and Profitability

Company net sales and revenues rose 13% year-over-year to $9.611 billion; equipment operations net sales increased 18% to $8.001 billion. Net income attributable to Deere & Company was $656 million, or $2.42 per diluted share. Equipment operations delivered a 5.9% operating margin for the quarter.

Small Ag & Turf Strong Performance

Small Ag & Turf net sales grew 24% year-over-year to $2.168 billion. Price realization was +2 points and currency translation added ~2.5 points. Operating profit increased to $196 million, yielding a 9% operating margin; full-year net sales now guided up ~15% with margin guidance of 13.5%–15%.

Construction & Forestry Surge

Construction & Forestry net sales rose ~34% year-over-year to $2.67 billion driven by higher shipment volumes and favorable FX (~+3.5 points). Operating profit more than doubled to $137 million and operating margin improved to 5.1%. Segment full-year net sales guidance increased to ~+15% and operating margin guide raised to 9%–11%.

Production & Precision Ag Stability and Inventory Progress

Production & Precision Ag net sales were $3.163 billion, up 3% YoY (currency translation ~+4 points). New and used inventory trends improved: Deere combines new inventory ~15% below March 2024 peak; high-horsepower tractor units down >10% from March 2025 peak and late-model used tractors showed double-digit sequential reductions.

Improving Order Books and Demand Signals

Order books strengthened across product lines—C&F order bank rose >50% in the past quarter to highest since May 2024; North American large tractor order velocity increased with rolling order books providing visibility into Q4. European tractor order books are ~4–5 months out; South American orders full through Q2.

Strengthened Financial Outlook

Company updated full-year net income guidance to $4.5 billion–$5.0 billion; effective tax rate guidance maintained at 25%–27%. Cash flow from equipment operations guidance increased by $500 million at both ends to $4.5 billion–$5.5 billion. Worldwide Financial Services outlook raised to $840 million for FY2026 driven by lower provision for credit losses.

Capital Returns and M&A / Product Investment

Returned nearly $750 million to shareholders in the quarter via dividends and share repurchases. Strategic moves include completion of the Tenna acquisition to enhance digital fleet/jobsite capabilities, and major product launches (new Deere-designed 20-ton excavators) planned at CONEXPO, supporting future growth and differentiation.

Cost and Operational Discipline

Excluding tariffs, production costs were lower year-over-year across segments due to operational efficiencies from higher production and disciplined overhead spending. First-quarter production-cost performance (ex-tariffs) was favorable.

Negative Updates

Large Ag Industry Weakness

The U.S. & Canada large ag equipment industry is expected to decline 15%–20% in 2026. Global large ag fundamentals remain challenged; Production & Precision Ag full-year net sales forecast is still down 5%–10% and segment operating margin forecast remains 11%–13%.

Tariff Headwind

Tariff exposure remains substantial—projected roughly $1.2 billion pretax for FY2026 (mitigation partially offset by volume). Tariff uncertainty (including potential IEPA/Section 232 developments) remains a meaningful risk to costs and pricing dynamics.

South America Softness and Pricing Actions

South American ag market softened: industry sales in South America now expected down ~5% (Brazil weaker); additional incentives were required in South America that muted price realization in PPA. Brazilian combines inventory remains above target and Deere plans underproduction in Q2–Q3 to reduce it.

C&F Near-Term Pricing Pressure

Construction & Forestry price realization was slightly negative in Q1 (just under -0.5 point) and the company trimmed C&F full-year price expectation by ~0.5 point due to faster-than-expected backlog build which delayed the timing of price actions.

Segment Margin Headwinds in PPA

Production & Precision Ag operating margin declined to 4.4% in Q1 (operating profit $139 million) due primarily to higher tariffs, unfavorable sales mix and higher warranty expenses despite modest net sales growth (+3%).

Material Inflation and Competitive Pressures

Management noted modestly increased materials inflation offset by overhead efficiencies; competition remains active in construction markets with some competitors signaling price actions that create timing/transactional price pressure until inventories normalize.

Exposure to Macro Risks

Risks include commodity-price sensitivity (corn/soybean price dynamics), high interest rates affecting producer margins (particularly in Brazil), pending elections (Brazil) and uncertainty around U.S. trade/tariff policy and Supreme Court outcomes that could materially change the cost environment.

Company Guidance

Deere updated fiscal 2026 guidance with consolidated net income now $4.5–$5.0 billion, an effective tax rate of 25–27%, and cash flow from equipment operations raised to $4.5–$5.5 billion (up $500 million at both ends); equipment operations net sales are expected to grow mid‑single digits. Segment guides: Production & Precision Ag net sales down 5–10% with ~1.5 points of price realization and ~3 points of positive currency translation, operating margin 11–13%; Small Ag & Turf net sales up ~15% (price +2 pts, FX +2 pts), margin 13.5–15%; Construction & Forestry net sales up ~15% (price +2.5 pts, FX ~2 pts), margin 9–11%. Q1 results included consolidated net sales $9.611 billion (+13%), equipment operations net sales $8.001 billion (+18%) and a Q1 equipment ops operating margin of 5.9%; PPA Q1 sales $3.163 billion (+3%, 4.4% margin), SAT $2.168 billion (+24%, 9% margin), C&F $2.67 billion (+34%, 5.1% margin); Q1 net income attributable was $656 million ($2.42 per diluted share). Financial Services Q1 net income was $244 million and FY guidance was raised to $840 million; tariffs are forecast at about $1.2 billion. Management cited stronger order books (C&F order bank +50%), improved used inventory (combines ~15% below Mar‑2024 peak; high‑horsepower tractors down >10% from Mar‑2025 peak) and industry outlooks including North American large‑ag -15% to -20% and construction/compact construction ~+5%.

Deere Financial Statement Overview

Summary

Strong profitability and sizable cash generation, but results appear to be normalizing after a prior-cycle peak. Key risks are elevated leverage (per annual debt-to-equity) and weaker cash conversion (FCF well below net income), which can matter in a downcycle.

Income Statement

Positive

Profitability is strong, with TTM (Trailing-Twelve-Months) gross margin around 36% and net margin around 11%, indicating solid pricing power and cost control for the cycle. However, growth has cooled: revenue is up modestly in TTM (~3%), while the prior two annual periods show revenue declines, and profitability is off the 2023 peak (when margins and earnings were notably higher). Overall, earnings quality looks good, but the trajectory suggests normalization after a very strong year.

Balance Sheet

Positive

Leverage is a key swing factor. Annual periods show elevated debt relative to equity (debt-to-equity roughly 2.5–2.9), which adds balance-sheet risk in a downcycle, even though returns on equity have been strong (roughly ~19–47% across periods, ~20% in TTM). The TTM leverage metric appears much lower than the annual figures, implying a meaningful shift in capital structure or classification, but based on the provided data set overall, the company still screens as more levered than typical industrial peers.

Cash Flow

Positive

Cash generation is healthy in absolute dollars (TTM operating cash flow ~$7.7B; free cash flow ~$3.6B) and TTM free cash flow growth is positive. The main weakness is conversion: in TTM, free cash flow is well below net income (about 43%), suggesting working-capital needs or capital intensity is limiting cash realization. Coverage of profit by operating cash flow is also only moderate in TTM, indicating cash flow can be more variable than accounting earnings.

Breakdown	TTM	Oct 2025	Oct 2024	Oct 2023	Oct 2022	Oct 2021
Income Statement
Total Revenue	46.01B	44.66B	50.52B	60.25B	51.28B	43.03B
Gross Profit	16.40B	16.30B	19.50B	22.31B	15.73B	13.71B
EBITDA	10.94B	11.66B	14.67B	17.48B	12.08B	10.64B
Net Income	4.81B	5.03B	7.10B	10.17B	7.13B	5.96B
Balance Sheet
Total Assets	103.44B	106.00B	107.32B	104.09B	90.03B	84.11B
Cash, Cash Equivalents and Short-Term Investments	8.20B	9.69B	8.48B	8.40B	5.51B	8.74B
Total Debt	14.39B	63.94B	65.46B	63.69B	52.20B	48.73B
Total Liabilities	77.08B	79.99B	84.39B	82.20B	69.67B	65.68B
Stockholders Equity	26.30B	25.95B	22.84B	21.79B	20.26B	18.43B
Cash Flow
Free Cash Flow	3.58B	3.23B	4.43B	4.12B	911.00M	5.15B
Operating Cash Flow	7.70B	7.46B	9.23B	8.59B	4.70B	7.73B
Investing Cash Flow	-1.65B	-2.06B	-6.46B	-8.75B	-8.48B	-5.75B
Financing Cash Flow	-6.15B	-4.58B	-2.72B	2.81B	826.00M	-1.08B

Deere Technical Analysis

Technical Analysis Sentiment

Positive

Last Price662.00

Price Trends

50DMA

515.74

Positive

100DMA

491.69

Positive

200DMA

494.89

Positive

Market Momentum

MACD

31.76

Negative

RSI

81.47

Negative

STOCH

68.47

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE, the sentiment is Positive. The current price of 662 is above the 20-day moving average (MA) of 564.89, above the 50-day MA of 515.74, and above the 200-day MA of 494.89, indicating a bullish trend. The MACD of 31.76 indicates Negative momentum. The RSI at 81.47 is Negative, neither overbought nor oversold. The STOCH value of 68.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DE.

Deere Risk Analysis

Deere disclosed 31 risk factors in its most recent earnings report. Deere reported the most risks in the "Production" category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Deere Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CAT	75 Outperform	$349.88B	39.98	43.54%	0.98%	-1.51%	-9.69%
OSK	73 Outperform	$10.73B	17.12	14.90%	1.56%	-2.28%	-0.53%
PCAR	72 Outperform	$65.74B	27.75	12.92%	3.83%	-15.29%	-42.93%
DE	68 Neutral	$160.82B	33.45	20.61%	1.34%	-11.66%	-27.80%
AGCO	64 Neutral	$9.98B	14.12	18.13%	1.10%	-20.09%	121.28%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
CNH	59 Neutral	$15.79B	31.08	6.61%	2.67%	-18.10%	-65.24%

* Industrials Sector Average

Performance Comparison

Deere

662.00

171.21

34.88%

AGCO

Agco

138.52

37.81

37.55%

CAT

Caterpillar

760.53

416.12

120.82%

CNH

CNH Industrial

12.98

-0.08

-0.61%

OSK

Oshkosh

170.49

61.96

57.09%

PCAR

Paccar

124.90

21.10

20.33%

Deere Corporate Events

Business Operations and StrategyExecutive/Board Changes

Deere Appoints Brian Sikes to Board of Directors

Positive

Dec 4, 2025

On December 4, 2025, Deere & Company announced the appointment of Brian Sikes, the board chair and CEO of Cargill, to its board of directors. Sikes’ extensive experience in the agricultural sector and his commitment to innovation and sustainability are expected to enhance Deere’s strategic direction and support its transformation towards more sustainable solutions. His appointment increases the board size to 11 members, with 10 being independent, non-employee directors.

The most recent analyst rating on (DE) stock is a Buy with a $530.00 price target. To see the full list of analyst forecasts on Deere stock, see the DE Stock Forecast page.

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Feb 20, 2026