Deere & Company

DA Davidson and RBC Capital argue that 2026 represents the trough for the agriculture equipment cycle. Deere itself cited a lack of used equipment alternatives and multiple plausible paths for farm fundamentals to improve, with early-order programs and machine usage hours supporting a near-term recovery thesis.

Baird analysts warn that recovery in large agricultural equipment demand could be delayed until 2028, pointing to persistently high corn and soybean supplies and significant USDA-reported corn ending stocks as structural headwinds that may suppress farmer purchasing power well beyond 2026.

Rapid adoption of Deere's precision agriculture portfolio — including JDLink Boost, Precision Essentials bundles, See & Spray, and new automation features — is seen driving higher-value product sales and recurring software revenue globally, which should structurally lift net margins and justify a premium earnings multiple over time.

Despite the technology narrative, analysts flag that Deere may be increasingly reliant on financing incentives and promotional programs to sustain equipment demand in a soft farm income environment. The USDA projects 2026 net farm income at $153.4 billion, a nominal decline, limiting farmers' organic willingness to pay for premium technology.

With the stock trading approximately 10% below the analyst consensus target of ~$643–$648 and around 20% below one estimate of intrinsic fair value of $644, several analysts argue the market is mispricing Deere's long-term earnings power and that the current discount presents a compelling entry point.

Despite the apparent discount to fair value estimates, Deere's current P/E of 33.1x screens as materially expensive against the U.S. machinery industry average of 26.8x and a peer average of 26.3x. Bank of America cut its price target to $607.50 with a Neutral rating, reflecting skepticism that premium multiples are warranted during a cyclical earnings trough.