# Deere & Company (DE)

**Exchange:** NYSE  
**Coverage as of:** 2026-Q2  
**Updated:** 2026-05-12  
**Report type:** Primer (steps 1–3 of 19)  
**API endpoint:** GET /api/v1/research/DE/primer

## Business Model

---
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

## Recent Catalysts

---
ticker: DE
step: 12
generated: 2026-05-12
source: quick-research
---

### Deere & Company (DE) — Investment Catalysts & Risks

#### Bull Case Drivers

1. **2026 = trough of ag cycle — replacement cycle building** — CEO May explicitly: "2026 will mark the bottom of the large ag cycle." Aging tractor fleet at historic high age (avg 12+ years US). As commodity prices stabilize + farmers can no longer defer purchases, a major replacement cycle starts in 2027. Historic ag cycles run 5-7 years peak-to-trough — 2026 should be the low.

2. **Construction & Forestry strength offsetting Ag weakness** — CF segment Q1 FY26 +111% operating profit YoY; Q4 FY25 sales +27%. CF benefits from infrastructure spending, road construction, and post-hurricane rebuild activity. Bright spot offsetting ag drag throughout the downcycle, demonstrating Deere's segment diversification.

3. **Precision Ag + recurring revenue transformation** — Unlimited Annual License (SaaS) model launched for software; precision ag is a $1.5B market opportunity targeting recurring revenue. See & Spray delivers 50%+ chemical savings. Battery-electric autonomous tractor deploys 2026 in orchards. By decoupling profits from tractor unit sales toward SaaS, Deere is building a recession-proof earnings floor.

4. **2030 autonomous corn production system goal** — Path to fully autonomous corn production by 2030. Already deployed autonomous 9R tractors at scale in select operations. Each technology layer adds recurring revenue + customer stickiness + ROIC. If achieved, transforms Deere's earnings multiple from cyclical industrial to growth tech.

#### Bear Case Risks

1. **$1.2B 2026 tariff headwind** — Primary challenge of 2026 is navigating $1.2B in tariff expense. Combined with declining unit volumes + unfavorable mix, this drives Q1 FY26 PPA operating profit down 59% YoY. If tariff escalation continues, 2027 recovery is harder to materialize.

2. **Farm income continuing to decline** — USDA 2026 forecast: continued pressure, another year of declining net farm income, stagnant commodity prices. North American large ag down 15-20% in 2026 per Deere. If farm income doesn't recover in 2027 (commodity prices stay low, input costs stay high), the cycle trough extends.

3. **High interest rates suppress equipment financing** — A $400K+ combine purchase financed at 7%+ is dramatically more expensive than at 3%. Farmer purchasing decisions are highly rate-sensitive. If Fed doesn't cut materially in 2026-27, equipment buying decisions get pushed further out.

4. **EPS dropped 40% in Q1 FY26 — execution at trough is hard** — Q1 FY26 EPS at ~$1.92 vs $3.19 prior year (-40%). PPA OP -59%. While CF + SAT compensating, the magnitude of PPA decline shows that the trough year is genuinely painful. Bears worry that "trough" gets pushed to 2027.

#### Upcoming Events

- **Q2 FY26 earnings (May 2026)** — Mid-year cycle confirmation; tariff impact actuals
- **Q3 FY26 earnings (August 2026)** — Mid-year guide reset
- **Q4 FY26 earnings (November 2026)** — FY27 guidance — pivotal for recovery thesis
- **Spring 2026 plant** — Order book visibility for 2026 sales
- **Autonomous tractor expansion** — Multi-quarter deployment milestones
- **Tariff developments** — Direct EPS impact

#### Analyst Sentiment

Sell-side consensus is **Hold / Buy** with average price targets in the $510-560 range vs. recent ~$490 trading levels (~4-14% upside). Bulls cite cycle trough + replacement cycle + autonomous/precision ag transformation. Bears focus on tariff, declining farm income, and EPS compression. The stock has been flat for 12 months — investors waiting for cycle inflection signal.

#### Research Date
Generated: 2026-05-12

## Full Research Available

This primer covers steps 1–3 of 19. The full deep dive (moat analysis, DCF, bull/bear,
management quality, earnings transcript analysis) is available via:

- Investment memo: /memo/de
- Full research API: GET /api/v1/research/DE/memo
- Coverage universe: /stocks