If you’ve spent any time looking at Deere & Co stock lately, you’ve probably noticed a weird tension. On one hand, you’ve got these iconic green tractors that basically run the world's food supply. On the other, the ticker is doing this frantic dance as investors try to figure out if we’ve finally hit the bottom of the agricultural cycle.
Honestly, it’s a mess of mixed signals.
As of mid-January 2026, Deere & Co stock (DE) is hovering around $514. That sounds high, but the context is everything. Just a few months ago, the mood was pretty grim. When the company dropped its fiscal 2025 results in late November, the stock took a 5.7% punch to the gut in a single day. Why? Because management basically told everyone to buckle up for a rough 2026.
The "Bottom of the Cycle" Gamble
John May, the CEO, didn't mince words. He called 2026 the "bottom of the large ag cycle." That’s CEO-speak for "it's going to get worse before it gets better." The company is forecasting a net income between $4 billion and $4.75 billion for the 2026 fiscal year. To put that in perspective, they pulled in about $5 billion in 2025 and a massive $7.1 billion in 2024.
We are looking at a serious slide.
The biggest culprit is the "Large Ag" segment. Row-crop farmers—the folks growing corn and soy—are feeling the squeeze. Crop prices are stubbornly low, and the cost of everything else (seeds, fertilizer, labor) is still high. When a farmer is looking at a $500,000 combine, and their bank account is looking thin, they don't buy the new shiny toy. They fix the old one. Or they buy used.
Deere is feeling this shift. In North America, the industry demand for large equipment is expected to drop another 15% to 20% this year. That is a massive hole to dig out of.
The $1.2 Billion Tariff Headache
You can't talk about Deere & Co stock right now without talking about tariffs. It’s the elephant in the room. The company is bracing for a $1.2 billion pre-tax hit from tariffs in fiscal 2026. That’s double what they dealt with in 2025.
Basically, it's a $300 million drag every single quarter.
Deere tries to offset this with "price realization"—which is just a fancy way of saying they raise their prices. But there’s a limit. If you raise prices too much when your customers are already broke, you just end up with a lot of unsold tractors sitting on dealer lots.
It’s Not All Mud and Grime
If you’re thinking this sounds like a total disaster, you’re kinda missing the bigger picture. There’s a reason 26 analysts still have a "Buy" rating on the stock compared to zero "Sells."
First, the small stuff is actually doing okay. While the giant tractors are struggling, the "Small Ag and Turf" and "Construction and Forestry" segments are actually expected to grow by about 10% in 2026. People are still building houses, and the dairy and livestock sectors are holding up better than row crops.
The Precision Ag Secret Weapon
The real reason people stay bullish on Deere & Co stock isn't the steel; it's the software. Deere isn't just an equipment company anymore. They’re a tech company.
Have you heard of "See & Spray"? It’s this wild AI system that uses cameras to identify weeds in real-time. It only sprays the weed, not the crop. In 2025, this tech covered 5 million acres. Farmers love it because it can slash herbicide costs by 50% or more.
Then there’s the autonomous tillage solution. It’s finally shipping for the 2026 spring season. This isn't some experimental lab project; it's real tech hitting real fields.
- Precision Essentials: Over 24,000 orders.
- JDLink Boost: Over 8,000 orders.
- Autonomous Electric Tractors: Rolling out with IoT integration for route optimization.
This "recurring revenue" model—where farmers pay for software subscriptions—is much higher margin than selling a hunk of metal once every ten years. It’s what makes the stock resilient even when the "cycle" is trash.
Dividends and the "Safety Net"
For the income-focused crowd, Deere is still a reliable ATM. The current quarterly dividend is $1.62 per share. That’s an annual payout of $6.48, giving it a yield of around 1.26%.
It’s not a huge yield, sure. But it’s incredibly safe. The payout ratio is only around 35%. Even with the projected earnings dip in 2026, they have plenty of room to keep paying—and growing—that dividend.
They’ve also been aggressive with buybacks. In 2023, they had a massive 6.4% buyback yield. While they’ve cooled off a bit lately to preserve cash during the downturn, the commitment to returning value to shareholders is built into their DNA.
What Most People Get Wrong
The biggest mistake people make with Deere & Co stock is looking at a single year's P/E ratio and panicking. Right now, the P/E is sitting around 27. On the surface, that looks expensive for a "slow" industrial company.
But you have to look at 2027.
Analysts expect EPS (Earnings Per Share) to surge nearly 28% in 2027 to about $22.40. If you buy the "bottom of the cycle" thesis, you’re basically getting in before the snapback.
The "John Deere" Moat
Deere has a 15.3% global market share in farm equipment. That’s the top spot. Their nearest rivals, like CNH Industrial and AGCO, are great, but they don't have the same dealer network or tech integration.
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When a farmer buys a Deere, they aren't just buying a machine. They’re buying into an ecosystem. Their maps, their soil data, and their fleet management are all in the "John Deere Operations Center." Switching to a competitor is a massive, data-heavy headache that most just won't do.
Actionable Insights for the 2026 Season
If you're watching the ticker, don't get distracted by the noise of the Q1 2026 earnings report coming up. It's likely going to be ugly. The "Large Ag" downturn is real, and the $1.2 billion tariff hit is a heavy lift.
Here is how to actually play it:
- Watch the Used Inventory: This is the leading indicator. When used tractor inventories drop, it means farmers will eventually have to buy new. Currently, used combine inventory has fallen 25% from its peak. That's a great sign.
- Monitor Crop Prices: If corn and soy prices start to tick up—even a little—the sentiment on DE stock will flip instantly.
- The "Tech" Multiple: Start viewing Deere as a tech play. As the percentage of revenue from software subscriptions grows, the stock's valuation should technically expand.
- Entry Points: Historically, buying Deere when the "cycle" feels the worst has been the winning move. If the stock retests its 52-week low around $404, it’s a very different conversation than buying at $530.
The 2026 fiscal year is going to be a test of patience. It’s a year of "managing the bottom." But for those who can look past the next two quarters, the green and yellow giant still has a lot of field left to cover.
Keep a close eye on the February 2026 Annual General Meeting. That’s where the board often sets the tone for the rest of the year’s buyback and dividend strategy. If they stay aggressive there, it’s a huge vote of confidence that the "bottom" is indeed in sight.