Deere & Company

(New York Stock Exchange)
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Slightly Bullish +25

Deere (DE) Shares Up After Jim Cramer Said It Could Go Higher

AI-generated analysis

πŸ“ˆ Deere & Company shares rose 21% over the past year and an additional 11.8% following Jim Cramer's positive commentary on June 6th regarding its potential for further upside.

πŸ’° The company reported first fiscal quarter results with $9.61 billion in revenue and $2.42 earnings per share, both exceeding analyst estimates of $9.12 billion and $2.02 respectively.

⚠️ In August 2025, shares fell 6.8% after Q3 earnings showed $10.3 billion in revenue and $4.75 per share, though the firm also flagged potential $600 million in tariff costs.

πŸ“‰ Jefferies analyst firm downgraded Deere to "Underperform," arguing the stock's current valuation already reflects a full farm cycle recovery despite declining U.S. farmer incomes.

πŸ”­ The brokerage set a $550 price target based on 15 times projected peak earnings for 2029, noting that current prices assume higher multiples of around 35x earnings versus historical peaks of 23x.

🚜 High-horsepower equipment sales in North America have declined for 29 consecutive months and are down approximately 39% from the 2023 peak, with inventories normalizing but past downturns lasting longer.

πŸ“‰ USDA projections indicate U.S. farmer incomes will fall about 15% in 2026 due to lower crop prices, higher input costs, trade volatility, and elevated debt levels weighing on equipment demand.

πŸš€ Management commentary suggested 2026 could mark the bottom of the agricultural equipment cycle, with construction and forestry sales up 34% compared to last year.

πŸ’» Deere is transitioning toward a recurring revenue ecosystem by selling software and subscription services related to data-driven farming systems as farmers adopt these technologies.

πŸ›‘οΈ The company is implementing cost-cutting initiatives to protect margins and remains insulated against various economic concerns as the new agricultural cycle begins.

πŸ“Š Shares have more than doubled from their 2022 cycle low and are up about 40% in the past seven weeks according to recent market data.

βš™οΈ Cramer noted on Tuesday that Deere can tell a tremendous story about farmer orders and potentially go higher still after an upgrade he saw.

🌾 Investors acknowledge Deere's high quality in machinery due to product innovation, market penetration, and its large proprietary farm database but caution against the current valuation levels.

Bullish Signals
  • Deere & Company shares are up by 21% over the past year and climbed an additional 11.8% following Jim Cramer's positive commentary on June 6th.
  • The company beat analyst estimates in its first fiscal quarter, posting $9.61 billion in revenue against expectations of $9.12 billion and $2.42 EPS versus $2.02.
  • Q3 earnings results showed strong performance with $10.3 billion in revenue and $4.75 EPS, both exceeding analyst forecasts.
  • Management raised its outlook for overall net income for the year despite soft demand for large tractors and harvesters.
  • Construction and Forestry sales jumped 34% year-over-year, with operating profit more than doubling during the same period.
  • Revenue grew 13% versus the same period last year, demonstrating resilient top-line growth.
  • Company leadership indicated that 2026 could mark the bottom of the agricultural equipment cycle, implying significant upside potential ahead.
  • Deere is successfully transitioning towards a recurring revenue ecosystem by selling software and subscription services related to data-driven farming systems.
  • The company has already implemented cost-cutting initiatives to protect margins, placing it in a strong position for future growth.
  • Citi remains bullish on the stock following these strong Q4 results, highlighting the positive momentum despite broader market concerns.
Risk Factors
  • Jefferies downgraded Deere to Underperform, warning that the stock's valuation of roughly 35 times earnings already prices in a complete farm cycle recovery even as U.S. farmer incomes continue to decline.
  • The U.S. Department of Agriculture projects U.S. farmer incomes will fall about 15% in 2026 due to lower crop prices, higher input costs, trade volatility, and elevated debt levels, which weigh on equipment demand.
  • High-horsepower equipment sales in North America have declined for 29 consecutive months and are down approximately 39% from their 2023 peak, indicating persistent weakness in the core business segment.
  • Jefferies stated that Deere would need a faster and stronger earnings rebound to justify current valuation levels, viewing this outcome as unlikely given slow technology adoption and weak farm fundamentals.
  • The stock has more than doubled from its 2022 cycle low and is up roughly 40% in the past seven weeks, suggesting the market may have overextended pricing despite concerns about sustained demand recovery.
  • Jefferies noted that past agricultural cycles downturns have lasted longer, including a significant 43-month stretch from 2014 to 2017, raising fears that current improvements could be temporary.
  • Management commentary suggests 2026 could mark the bottom of the cycle, but this implies further downside risk for shareholders if the recovery does not materialize as quickly or strongly as expected.
Full Analysis
Jim Cramer recently highlighted Deere & Company (NYSE: DE) on his show, suggesting the stock could go higher following positive commentary on the agricultural equipment cycle. The article notes that Deere has positioned itself as a key player in robotics and physical AI through products like sprayer systems using computer vision. Recent market performance included an 11.6% rise in February 2026 after Q1 earnings, which showed $9.61 billion in revenue and $2.42 EPS, both beating estimates of $9.12 billion and $2.02 respectively. Earlier Q3 figures in August 2025 also beat estimates with $10.3 billion in revenue, though the company faced potential $600 million in tariff costs. Cramer quoted on June 6, 2025, mentioned seeing an analyst upgrade and believes Deere can tell a strong story about farmer orders. However, analyst sentiment is mixed. Jefferies downgraded Deere to Underperform, stating the stock already reflects a full farm cycle recovery despite declining U.S. farmer incomes projected by USDA for 2026. The brokerage cites high valuation at roughly 35 times earnings versus prior peaks of 23 times, with high-horsepower equipment sales in North America down 39% from the 2023 peak after 29 straight months of decline. Jefferies believes a faster earnings rebound is unlikely given slow technology adoption and weak fundamentals, though they acknowledge Deere's high quality through product innovation and proprietary data. Contrastingly, other analysts remain bullish. One perspective suggests that while Q1 results have already pushed shares up 23% this year with an overall one-year return of 19%, the stock has room to run if 2026 marks the cycle bottom. Management raised its outlook for 2026 net income, noting strong construction and forestry sales where operating profit more than doubled. The company is implementing cost-cutting initiatives and developing data-driven farming systems that could generate recurring revenue from software subscriptions. Despite broader market concerns about tariffs and Middle East conflict affecting the S&P 500, Deere is viewed as well-positioned due to its insulated nature from some macroeconomic worries.