Deere & Co (NYSE: $DE) is ripping higher after delivering a first-quarter earnings beat and raising its full-year outlook, reinforcing investor confidence that the industrial giant may be emerging from the bottom of its current cycle.
The agricultural and construction equipment leader reported fiscal Q1 2026 earnings of $2.42 per share, beating estimates by $0.31. Equipment net sales came in at $8.0 billion, while total net sales and revenue climbed 13% year-over-year to $9.61 billion, reflecting strong demand across several key segments.
Net income reached $656 million for the quarter. While that marked a 25% decline compared to the same period last year, investors focused on accelerating revenue growth, improved outlook, and strength outside the large agriculture segment.
Construction and Small Agriculture Lead the Recovery
The biggest story from the quarter was clear strength in Deere’s smaller agriculture and construction divisions.
Small Agriculture & Turf delivered standout performance, with net sales jumping 24% to $2.17 billion and operating profit surging 58%. Meanwhile, Construction & Forestry posted even stronger growth, with net sales rising 34% and operating profit more than doubling.
These gains highlight a shift in demand toward construction equipment and smaller farming solutions, helping offset ongoing weakness in Deere’s large agriculture business.
Production & Precision Agriculture, the company’s largest segment, saw sales rise just 3%, while operating profit dropped sharply due to tariffs, warranty costs, and unfavorable product mix.
Despite that pressure, management signaled confidence that the worst of the cycle may be behind the company.
Deere Raises Full-Year Profit Outlook
Deere boosted its fiscal 2026 net income forecast to a range of $4.5 billion to $5.0 billion, reflecting improving momentum and stronger order activity.
Management expects Small Agriculture & Turf and Construction & Forestry sales to increase approximately 15% this year, while large agriculture markets are projected to remain weak, with demand expected to decline between 15% and 20% in North America.
Financial Services also contributed positively, with net income rising to $244 million, supported by favorable financing spreads and lower credit losses.
Institutional and Insider Activity Sends Mixed Signals
Institutional positioning around Deere has been mixed. Over 1,000 funds added shares, while more than 1,100 reduced exposure in the most recent quarter.
Major additions came from Capital World Investors and Northwestern Mutual Wealth Management, while UBS Asset Management and JPMorgan significantly reduced their holdings.
Insiders have also been net sellers over the past six months, including CEO John May, who sold more than 52,000 shares.
Meanwhile, Wall Street sentiment remains bullish overall, with multiple firms maintaining Buy and Outperform ratings and price targets reaching as high as $612.
Market Performance
Deere stock surged following the earnings release, climbing more than 10% intraday to around $656 and hitting new highs for the year.
The move pushed Deere to the top of its 52-week range, which spans from $404 to $658, marking a massive recovery from last year’s lows.
The stock is now up more than 41% year-to-date and roughly 29% over the past year, reflecting renewed investor optimism about the company’s growth outlook.
However, the rally has pushed shares above the average Wall Street price target of approximately $514, suggesting investors are pricing in stronger future performance than analysts currently expect.
Is DE A Buy In 2026?
Deere’s latest results highlight a company in transition. While its core large agriculture business remains under pressure, strength in construction and smaller agriculture segments is helping drive overall growth.
With rising revenue, improving demand trends, and a higher full-year profit outlook, investors are betting Deere is entering the early stages of its next expansion cycle.
If construction demand continues to accelerate and agricultural markets stabilize, Deere could potentially be one of the strongest industrial performers in 2026.
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