Deere & Company
DEFinancial Analysis · Updated May 12, 2026 · Coverage 2026-Q2
Latest Q Revenue
$9.6B
Q1 FY2026 · +13% YoY
TTM ROIC
18.5%
FY2025 (Trough) · Equipment Operations ROIC: Equipment Ops Operating Profit / Equipment Ops Invested Capital (excludes Financial Services segment) · WACC ~8.5% · Moat spread +10pp
Margin Profile
Gross 38.4%
Operating 20.6%
FCF 7.5%
FY2025
Diluted Shares
270M
FY2025 · -2.5% (buyback)
Business Overview
ticker: DE step: 01 generated: 2026-05-12 source: quick-research
Deere & Company (DE) — Business Overview
Business Description
Deere & Company (John Deere) is the global leader in agricultural equipment and a top-3 in construction/forestry. The company is transforming from a pure equipment manufacturer into a precision agriculture + autonomous machinery + recurring software revenue platform under CEO John May. The 2024-2026 ag downcycle is the deepest in 15+ years — Deere identifies 2026 as the trough. Construction & Forestry is significantly stronger. The 2030 goal: fully autonomous corn production system + Unlimited Annual License (SaaS) for software.
Revenue Model
- Production & Precision Agriculture (PPA, ~38% of revenue): Large tractors, combines, sprayers, planters; See & Spray, AutoPath, Operations Center software
- Small Agriculture & Turf (SAT, ~17%): Mid-size tractors, hay & forage, turf, residential
- Construction & Forestry (CF, ~30%): Construction equipment (Wirtgen acquired 2017), forestry, road building
- Financial Services (~15%): Equipment financing through John Deere Capital Corporation
- Precision Ag software increasingly recurring (SaaS-like) — Unlimited Annual License
Products & Services
Production & Precision Agriculture
- 9R/8R series tractors: Large row-crop
- S Series combines: Grain harvesting
- X9 combines: Largest combines
- 400/600 series sprayers: With See & Spray (50%+ chemical savings via camera-based targeting)
- DB Planter: Precision planting
- JDLink Connect + Operations Center: Software platform
- AutoTrac / AutoPath: GPS-guided autonomy
- Autonomous 9R tractor: 2026 deployment in select operations
Small Agriculture & Turf
- 5/6 series tractors: Mid-size
- W260 windrower, R450 self-propelled forage harvester
- John Deere Riding mowers + Gator UTVs
- Battery-electric autonomous tractor (2026): Orchards + vineyards
Construction & Forestry
- Construction: Excavators, loaders, dozers, graders
- Wirtgen Group (acquired 2017): Road construction (asphalt pavers, soil + cold milling, recycling)
- Forestry: Timberjack/Wagner forwarders, harvesters
- Compact construction equipment
Financial Services
- John Deere Capital Corporation: Equipment financing for customers + dealers
- $40B+ portfolio
- Cyclically managed; major credit quality marker
Customer Base & Go-to-Market
- Farmers (US, Brazil, India, EU): Primary ag customer base
- Construction contractors: Road building, infrastructure (Wirtgen)
- Forestry companies: Logging operations
- Dealers: ~2,000+ John Deere dealers globally
- Geographic mix: ~50% US/Canada, ~25% Europe + CIS + Africa, ~15% Latin America, ~10% Asia-Pacific
- Channel: Dealer network (very strong, with deep customer relationships)
Competitive Position
Deere is the global #1 in farm equipment with ~30% market share globally (CNH Industrial #2 with New Holland + Case IH, AGCO #3 with Massey Ferguson + Fendt, Kubota #4). Moats: (1) dealer network density + service capability, (2) precision ag + autonomy leadership (years ahead in Operations Center), (3) brand premium with farmers ("Nothing runs like a Deere"), (4) Wirtgen road-building scale. Faces (1) cyclical commodity prices, (2) Chinese competition in emerging markets, (3) farmer right-to-repair regulatory pressure (US settlement Dec 2023), (4) tariff escalation.
Key Facts
- Founded: 1837 (John Deere, Vermont)
- Headquarters: Moline, IL
- Employees: ~75,000
- Exchange: NYSE
- Sector / Industry: Industrials / Farm & Construction Machinery
- Market Cap: ~$135B (May 2026)
- CEO: John C. May II (since 2019)
- Dividend: $6.40 annual ($1.60 quarterly)
- 5+ consecutive years of dividend growth
- FY end: Late October/early November
- Tariff headwind 2026: ~$1.2B
Financial Snapshot
ticker: DE step: 04 generated: 2026-05-12 source: quick-research
Deere & Company (DE) — Financial Snapshot
Note: Deere fiscal year ends late October. "FY2025" = fiscal year ended November 2025.
Income Statement Summary
| Metric | FY2023 | FY2024 | FY2025 | YoY |
|---|---|---|---|---|
| Net Sales & Revenue | $61.3B | $51.7B | $45.7B | -12% |
| Equipment Sales | $55.6B | $44.8B | $39.0B | -13% |
| Net Income | $10.2B | $7.1B | $5.0B | -29% |
| Diluted EPS | $34.63 | $25.62 | $18.50 | -28% |
Segment Revenue (FY2025)
| Segment | Revenue | YoY |
|---|---|---|
| Production & Precision Ag (PPA) | $17.0B | -17% (was $20.6B FY24) |
| Small Agriculture & Turf (SAT) | $7.2B | -6% |
| Construction & Forestry (CF) | $11.4B | -10% |
| Financial Services | $7.0B | flat |
| Net Sales (excl. FinSvc) | $35.6B | -13% |
Q1 FY2026 Highlights
| Metric | Q1 FY26 | YoY |
|---|---|---|
| Net Sales & Revenue | $9.61B | +13% |
| PPA Operating Profit | $139M | -59% (tariffs + mix + warranty) |
| SAT Operating Profit | $196M | +58% |
| CF Operating Profit | $137M | +111% (volume) |
| EPS | ~$1.92 (consensus) | -40% vs $3.19 prior |
Cycle Indicators (2026 — Trough Year)
| Metric | Status |
|---|---|
| North American Large Ag (PPA) | Down 15-20% in FY26 |
| US Farm Income | Continuing to decline per USDA |
| Tariff headwind 2026 | $1.2B |
| Aging fleet replacement cycle | Building |
| 2027 recovery expectation | Yes (consensus) |
Construction & Forestry — Bright Spot
| Period | CF Net Sales | YoY |
|---|---|---|
| Q4 FY25 | $3.38B | +27% |
| Q1 FY26 | growing | +111% op profit |
Cash Flow & Balance Sheet (FY2025)
| Metric | Value |
|---|---|
| Operating Cash Flow | ~$7B |
| Capital Expenditures | ~$1.7B |
| Free Cash Flow | ~$5B |
| Cash & Equivalents | ~$6B |
| Total Debt | ~$60B (most is at John Deere Capital) |
| Net Debt Industrial only | modest |
Key Ratios (approximate, May 2026)
- P/E (forward FY26): ~25x | EV/EBITDA: ~14x | Dividend Yield: ~1.4%
- ROIC (cycle peak): ~25%; (cycle trough): ~15%
- FCF Yield: ~4%
FY2026 Outlook
- Trough year per management
- Net Income guide: $4.5-5.5B (modest decline or flat)
- Tariff headwind absorbed
- CF segment strength continuing
Forward Estimates
- FY2026E Net Income: ~$4.5-5.5B (mgmt)
- FY2026E EPS: ~$16.50-18 (consensus)
- FY2027E EPS: ~$22-25 (recovery)
- FY2028E EPS: ~$28+ (full cycle peak)
Capital Return
- Dividend $6.40 annual = ~$1.7B paid
- 5+ consecutive years of dividend growth
- Buybacks: ~$5B annual run-rate
- Total return: ~$7B annual capital return ~5% yield
Deeper Financial Analysis
The fundamental tier adds 9 additional research dimensions for $DE.
Revenue Breakdown
Segment revenue, geographic mix, product-line contribution margins, and cohort dynamics.
Financial Trends
Quarter-over-quarter momentum, leading indicators, and inflection point analysis.
Balance Sheet
Debt structure, liquidity runway, dilution risk, and working capital dynamics.
Capital Allocation
Buyback cadence, M&A appetite, dividend policy, and reinvestment priorities.
Returns on Capital (ROIC)
Multi-year ROIC vs. WACC, marginal returns on reinvestment, sales-to-invested-capital efficiency, and moat spread.
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