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Deere's Mixed Quarter Has Analysts Fine-Tuning Their Targets

MarketDash Editorial Team
10 days ago
Deere beat Q4 expectations but issued a weaker outlook for fiscal 2026, prompting analysts to adjust their price targets. The equipment maker expects net income to fall up to 20% next year despite CEO John May's optimism about structural improvements.

Deere & Company (DE) delivered a classic good news, bad news scenario this week. The heavy machinery maker crushed fourth-quarter expectations on Wednesday, but its outlook for fiscal 2026 left something to be desired.

The numbers told an interesting story. Deere reported earnings per share of $3.93, edging past the $3.88 consensus estimate. More impressively, quarterly sales jumped 11% year-over-year to $12.39 billion, blowing past analyst expectations of $9.85 billion by a considerable margin.

CEO John May put a positive spin on the results, noting the company's resilience through a challenging period. "This past year brought its share of challenges and uncertainty, but thanks to the structural improvements we've made and the diverse customer segments and geographies we serve, we were able to achieve our best results yet for this point in the cycle," he said.

But here's where things get less cheerful. Deere's fiscal 2026 guidance projects net income between $4.0 billion and $4.75 billion, which translates to a year-over-year decline of somewhere between 5.5% and 20%. The company expects operating cash flow of $4.0 billion to $5.0 billion. On the product side, production and precision agriculture sales are forecast to drop 5% to 10%, though small agriculture and turf revenue, along with construction and forestry sales, should each climb about 10%.

Deere shares edged up 0.6% to $472.82 on Friday, suggesting investors were digesting the mixed signals.

Analysts responded to the earnings with some recalibration. RBC Capital analyst Sabahat Khan kept an Outperform rating but trimmed the price target from $542 to $541—barely a haircut. Truist Securities analyst Jamie Cook maintained a Buy rating and actually raised the price target from $609 to $612, showing continued confidence. Meanwhile, Evercore ISI Group analyst David Raso held his In-Line rating but made the most significant adjustment, cutting the target from $487 down to $458.

The diverging analyst reactions reflect the complexity of Deere's situation: strong current performance offset by headwinds ahead in key agricultural segments.

Back to News

Deere's Mixed Quarter Has Analysts Fine-Tuning Their Targets

MarketDash Editorial Team
10 days ago
Deere beat Q4 expectations but issued a weaker outlook for fiscal 2026, prompting analysts to adjust their price targets. The equipment maker expects net income to fall up to 20% next year despite CEO John May's optimism about structural improvements.

Deere & Company (DE) delivered a classic good news, bad news scenario this week. The heavy machinery maker crushed fourth-quarter expectations on Wednesday, but its outlook for fiscal 2026 left something to be desired.

The numbers told an interesting story. Deere reported earnings per share of $3.93, edging past the $3.88 consensus estimate. More impressively, quarterly sales jumped 11% year-over-year to $12.39 billion, blowing past analyst expectations of $9.85 billion by a considerable margin.

CEO John May put a positive spin on the results, noting the company's resilience through a challenging period. "This past year brought its share of challenges and uncertainty, but thanks to the structural improvements we've made and the diverse customer segments and geographies we serve, we were able to achieve our best results yet for this point in the cycle," he said.

But here's where things get less cheerful. Deere's fiscal 2026 guidance projects net income between $4.0 billion and $4.75 billion, which translates to a year-over-year decline of somewhere between 5.5% and 20%. The company expects operating cash flow of $4.0 billion to $5.0 billion. On the product side, production and precision agriculture sales are forecast to drop 5% to 10%, though small agriculture and turf revenue, along with construction and forestry sales, should each climb about 10%.

Deere shares edged up 0.6% to $472.82 on Friday, suggesting investors were digesting the mixed signals.

Analysts responded to the earnings with some recalibration. RBC Capital analyst Sabahat Khan kept an Outperform rating but trimmed the price target from $542 to $541—barely a haircut. Truist Securities analyst Jamie Cook maintained a Buy rating and actually raised the price target from $609 to $612, showing continued confidence. Meanwhile, Evercore ISI Group analyst David Raso held his In-Line rating but made the most significant adjustment, cutting the target from $487 down to $458.

The diverging analyst reactions reflect the complexity of Deere's situation: strong current performance offset by headwinds ahead in key agricultural segments.