DE · Deere
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $720
Updated ·
Price against the kill line
6.5% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $720.00, set on 13 November 2026. The shares are up 12.5% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $720, over the 23 September 2026 52-week high, which would show the shares leading; or a fiscal 2027 outlook on 25 November 2026 implying earnings per share above the $23.40 consensus.
Research onlyNot in the portfolio.
Catalyst
Key figures from the filings · Industrials
Quarter to 2 August 2026, filed 27 August 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 12,608
- Revenue, change on a year (%)
- +4.9
- Operating margin (%)
- 14.9
- Free cash flow, four quarters ($M)
- 6,021
- Price to earnings (×)
- 37.3
- Free-cash-flow yield (%)
- 3.3
All filed numbers
What Deere reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Operating margin (%) |
|---|---|---|---|
| filed | 12,608 | +4.9 | 14.9 |
| filed | 13,369 | +4.7 | 17.2 |
| filed | 9,611 | +13.0 | 8.7 |
| filed | 12,394 | +11.2 | 11.5 |
| filed | 12,018 | −8.6 | 13.3 |
| filed | 12,763 | −16.2 | 18.3 |
| Pre-tax income ($M) | 1,882 |
| Net income ($M) four quarters: 4,873 | 1,379 |
| Diluted shares, change on a year (%) against the quarter to 27 July 2025 | −0.3 |
| Operating cash flow ($M) | 7,245 |
| Capital spending ($M) | 1,224 |
| Free cash flow ($M) | 6,021 |
| Cash and short-term investments ($M) | 8,928 |
| Debt ($M) | Not available |
| Net cash, cash less debt ($M) | Not available |
| Deferred revenue ($M) +1.9% on a year | 891 |
| Backlog, orders not yet delivered ($M) +2.6% on a year | 1,871 |
| Receivables ($M) | Not reported |
| Inventory ($M) | 7,811 |
| Shareholders' equity ($M) | 27,990 |
| Market value ($M) | 181,604 |
| Enterprise value, market value plus net debt ($M) | Not available |
| Enterprise value to sales (×) | Not available |
| Enterprise value to operating income (×) | Not available |
| Price to earnings (×) | 37.3 |
| Price to book value (×) | 6.5 |
| Free-cash-flow yield (%) | 3.3 |
Short interest (FINRA, settled 15 October 2026, published 13 November 2026): 1.9% of shares outstanding sold short, 4.2 days of average trading to cover, −9.1% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $23.4M |
| 12 monthsfrom | $0 | $55.9M |
The thesis
Deere & Company is more likely to lag the S&P 500 over the next three months. The share price already reflects a farm-equipment recovery in fiscal 2027, and the report on 25 November 2026 must deliver a first outlook that meets it. Analysts' consensus calls for fiscal 2027 earnings per share of $23.40, up 29.2% from a year earlier (Barchart, 29 October 2026). The shares closed at $678.79 on 12 November 2026, close to the $691.91 consensus target in the same report.
The business is mixed. Construction and small equipment are growing. Large farm machinery, Deere's biggest segment, is still shrinking. Chief executive John May said on 20 August 2026 that 2026 "will mark the bottom of the current ag equipment cycle." Analyst estimates already count on that recovery, and the outlook on 25 November 2026 will show whether the company's own numbers support it. The rating is Low because the shares already price in a full recovery, and the outlook will more likely confirm the estimates than raise them.
Bullish and bearish views on Deere & Company
The bull case on Deere & Company (DE), in brief: third quarter beat and a higher floor. The bear case: large farm machinery still shrinking.
Bull case
- Third quarter beat and a higher floor. Net income for the quarter ended 2 August 2026 was $1.379 billion, or $5.10 per share, up from $4.75 a year earlier, and the company raised the low end of its fiscal 2026 net income guide to $4.75 billion with the top at $5.00 billion (company 8-K, 20 August 2026). Zacks put the consensus for the quarter at $4.79 per share.
- Construction is growing fast. Construction and Forestry sales rose 18% to $3.618 billion in the third quarter and operating profit rose 84% to $436 million. Deere expects the segment's fiscal 2026 sales to rise about 20% (8-K, 20 August 2026).
- Small equipment is ahead of large. Small Agriculture and Turf sales rose 12% to $3.383 billion, with a margin of 18.4% against 16.0% a year earlier (8-K, 20 August 2026).
- Early 2027 orders were firm. After the August report, Oppenheimer raised its target to $685 and pointed to stronger-than-expected early bookings for 2027 seasonal equipment (Investing.com).
- Fewer, cheaper factories. On 4 November 2026 Deere announced it will close its Ottumwa and Clarion, Iowa, sites, moving windrower production to Des Moines Works by the end of fiscal 2027 and round balers to Ankeny by the end of fiscal 2028 (Farm Progress).
Bear case
- Large farm machinery still shrinking. Production and Precision Agriculture sales fell 6% to $3.998 billion in the third quarter and operating profit fell 9%. Deere expects the segment's fiscal 2026 sales to fall about 10% (8-K, 20 August 2026).
- Weak demand outside North America. Deere's 20 August 2026 outlook has U.S. and Canada large-tractor and combine demand down 15–20% and South America down 15–20%. JPMorgan, which kept a Neutral rating and a $585 target after the report, flagged weak demand signals in Brazil and Europe (Investing.com).
- Annual earnings still falling. Net income for the first nine months of fiscal 2026 was $3.808 billion, down from $3.962 billion a year earlier (8-K, 20 August 2026). The consensus calls for fiscal 2026 earnings per share of $18.11, down 2.1% (Barchart, 29 October 2026).
- A high bar for 2027. The $23.40 consensus for fiscal 2027 earnings per share assumes the recovery shows up next year (Barchart, 29 October 2026). Of 23 analysts in that count, nine rate the shares Hold.
- An executive sold shares. Ryan Campbell, president of Worldwide Construction and Forestry and Power Systems, exercised options and sold 23,260 shares on 21 August 2026, 7,839 on 24 August 2026 and 4,860 on 31 August 2026 at about $651–654 a share. The sales were under a Rule 10b5-1 plan (SEC Form 4 filings).
- Labour friction. IG Metall held warning strikes at the Kaiserslautern, Germany, plant in early November 2026. Farm Progress reported that UAW members rejected a Deere offer in an August vote.
Price setup
The shares closed at $678.79 on 12 November 2026, down from $691.75 the day before and 5.9% below the 52-week intraday high of $721.22 set on 23 September 2026. The 52-week closing low was $462.86 on 9 December 2025.
The last close sits above the 50-day moving average of $668.22 and the 200-day moving average of $609.62, both as of 12 November 2026. On adjusted daily closes the shares gained 11.8% over three months, from a 14 August 2026 reference close shortly before the third-quarter report. Barchart counted a 36.8% gain over the 52 weeks to late October 2026, against 12.4% for the S&P 500.
The shares have traded between $663.31 (5 November 2026) and $691.75 (11 November 2026) in the sessions since the restructuring announcement. The September high is the level a stronger fiscal 2027 outlook would need to clear.
Catalysts ahead
- 25 November 2026: Fourth-quarter fiscal 2026 results and first fiscal 2027 outlook, before the market opens. The first net income guide for fiscal 2027 shows whether management's numbers support the $23.40 consensus for earnings per share and the expected recovery in large farm machinery.
- ~19 February 2027 (est.): First-quarter fiscal 2027 results. The first quarter of the new year shows whether large-agriculture orders and sales have turned up in North America and whether Brazil and Europe are still weak.
What would change the view
A daily close above $720, over the 23 September 2026 52-week high, which would show the shares leading; or a fiscal 2027 outlook on 25 November 2026 implying earnings per share above the $23.40 consensus.
What it trades with
Deere trades as the bellwether of the farm-equipment cycle. It tends to move with CNH Industrial and AGCO on news about farm incomes, crop prices and orders for large machinery. Its construction business, which grew 18% in the third quarter, links it to Caterpillar and North American construction demand. Financial Services earned $219 million in the third quarter (8-K, 20 August 2026), so dealer and customer financing also ties results to interest rates and used-equipment values. Restructuring news from Iowa and union bargaining in Germany and the United States affect costs, with little bearing on demand.
Notes
- Deere's fiscal year ends in late October or early November, so fiscal 2027 runs from about November 2026 to October 2027.
- Deere consolidates its Financial Services arm, so reported results include lending income that depends on interest rates and used-equipment values.
The evidence, claim by claim (7)
- Third-quarter net income was $1.379 billion, or $5.10 per share, up from $1.289 billion, or $4.75 per share, a year earlier; total net sales and revenues rose 5% to $12.608 billion. Deere 8-K, Exhibit 99.1, 20 August 2026 · as of
- Deere raised its fiscal 2026 net income guidance to $4.75–5.00 billion and said 2026 will mark the bottom of the current ag equipment cycle. Deere 8-K, Exhibit 99.1, 20 August 2026 · as of
- Production and Precision Agriculture sales fell 6% to $3.998 billion in the third quarter; the fiscal 2026 segment outlook is sales down about 10%. Deere 8-K, Exhibit 99.1, 20 August 2026 · as of
- Construction and Forestry sales rose 18% to $3.618 billion and operating profit rose 84% to $436 million in the third quarter. Deere 8-K, Exhibit 99.1, 20 August 2026 · as of
- Consensus fiscal 2027 earnings per share is $23.40, up 29.2%; the consensus price target is $691.91 across 23 analysts, nine of them at Hold. Barchart earnings preview, 29 October 2026 · as of
- Deere will close its Ottumwa and Clarion, Iowa, sites, moving windrower production to Des Moines Works by the end of fiscal 2027. Deere announcement reported by Farm Progress, 4 November 2026 · as of
- Ryan Campbell, president of Worldwide Construction and Forestry and Power Systems, sold 23,260 shares at an average $651.18 on 21 August 2026 under a Rule 10b5-1 plan. SEC Form 4 filed 25 August 2026 · as of
Sources
- DEERE & CO - Form 8-K - FY2026 · sec.gov ·
- Deere & Company's Earnings: What to Expect · finance.yahoo.com ·
- JPMorgan raises Deere stock price target on production outlook · investing.com
- Deere to close 2 Iowa plants in restructuring · farmprogress.com
- Zacks
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