Key Takeaways
- Deere delivered Q3 earnings of $5.10 per share, exceeding analyst expectations of $4.69 by $0.41
- The company generated $12.61B in revenue, significantly surpassing the $10.81B analyst forecast
- Shares gained 0.6% during premarket hours, reaching $584
- Updated 2026 net income projections now range from $4.75B to $5B, revised upward from the previous $4.5B-$5B estimate
- Regional demand forecasts were adjusted lower, with North American large-equipment sales projected to decline 15%-20%
The agricultural equipment giant posted third quarter earnings of $5.10 per share, surpassing analyst projections of $4.69. The company’s revenue reached $12.61 billion, comfortably exceeding the consensus estimate of $10.81 billion. Shares responded positively, climbing 0.6% to $584 in early premarket activity.
Compared to the same period last year when Deere recorded EPS of $4.75 on approximately $7.3 billion in sales, this quarter’s agricultural equipment division alone generated roughly $7.4 billion. While the expansion remains measured, the trajectory demonstrates positive momentum.
The performance exceeded expectations, though analysts had tempered their forecasts considerably. Agricultural producers have faced sustained financial headwinds, particularly as corn valuations retreated from peak levels. Corn commanded prices exceeding $6 per bushel in early 2022, with spikes above $8 during certain periods. Such commodity strength typically fuels equipment purchases. Recent market conditions have been far less favorable.
Multi-Year Decline in Equipment Sales
Deere’s equipment revenue reached its zenith at approximately $41 billion during fiscal 2023. The figure contracted to $32 billion in fiscal 2024, then further to $28 billion in fiscal 2025. Projections for 2026 indicate sales will remain around the $28 billion mark before an anticipated rebound to roughly $30 billion in 2027.
Against this backdrop, Thursday’s earnings surprise appears more like cautious optimism than outright triumph.
The company elevated its fiscal 2026 net income forecast to a range of $4.75 billion to $5 billion, improving upon the $4.5 billion to $5 billion projection issued in May. That earlier guidance had underwhelmed the investment community, particularly given that Deere generated approximately $5 billion in net income during fiscal 2025.
JPMorgan’s Tami Zakaria had cautioned before the earnings release that emerging data from Brazilian and North American markets appeared weaker than Deere’s existing forecasts. Her concerns proved prescient. The company reduced its industry sales projections across several key markets.
Regional Demand Forecasts Adjusted Downward
North American large-equipment sales continue to face a projected decline of 15% to 20%. South American guidance was revised to anticipate a 15%-20% contraction, down from approximately 15% previously. European market expectations were reduced to flat growth, retreating from the earlier projection of flat to up 5%.
These downward adjustments are creating margin pressure within Deere’s large agriculture machinery division.
Following the report, Zakaria reduced her fiscal 2027 EPS forecast to $20.49 from $22.81. The broader analyst consensus stands at $22.19 for 2027, representing growth from this year’s anticipated $18.08.
She maintains a Hold rating on the stock with a $570 price objective, observing that current investor sentiment leans negative.
The stock currently commands a forward earnings multiple of approximately 27 times. Three years earlier, during a more robust agricultural cycle, that valuation metric hovered closer to 12 times.
Prior to Thursday’s session, DE shares had declined roughly 1% over the preceding month while posting gains of approximately 19% over the trailing twelve months. Year-to-date performance showed the stock advancing around 31% heading into this week.
InvestingPro assigns Deere’s Financial Health score a rating of “fair performance.”
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