On Thursday, Deere & Company ( DE ) shares tumbled after the agricultural equipment giant posted mixed third-quarter results and trimmed its full-year profit forecast, highlighting persistent headwinds from declining sales, tariffs, and cautious customer demand.

The heavy machinery maker reported earnings per share of $4.75, beating the consensus of $4.67. It reported a 9% decline in quarterly sales to $12.02 billion, beating the consensus of $10.31 billion.

Production and precision agriculture sales decreased 16% for the quarter to $4.27 billion due to lower shipment volumes and unfavorable price realization. Operating profit slumped 50% to $580 million primarily due to lower shipment volumes/sales mix.

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Deere narrowed its fiscal 2025 net income guidance to between $4.75 billion and $5.25 billion, compared to its previous forecast of $4.75 billion to $5.50 billion, citing that customers remain cautious amid ongoing uncertainty.

Truist Securities said Deere noted some green shoots, including better-than-expected retail sales for tractors in Europe, earthmoving and forestry were positive after several quarters of flat to declining growth, and improving demand in North America turf and compact equipment.

Deere projects North American sprayer sales to fall 20% in 2026 based on early orders but views this as not reflective of overall market demand, noting sprayers are only one year into a downturn versus two years for tractors and combines.

Truist’s Jamie Cook sees 2025 as the EPS trough, with potential upside from production aligned with retail demand, stronger pricing, tariff management, and cost efficiencies, even if overall retail demand remains flat.

Truist updated fiscal 2025, 2026, and 2027 earnings per share estimates to $18.30, $21.85, and $27.90, respectively (from $18.55, $24.20, and $30.00, respectively), resulting in a price forecast update from $619 to $602, with an unchanged Buy rating.

Analyst Jamie Cook sees greener pastures ahead for Deere & Company ( DE ), calling it one of the best-managed names in the industrial machinery space, underpinned by a growing technology platform and a resilient earnings stream. Cook notes that Deere has steadily improved through-cycle margins, returns, and cash flow, positioning it to outpace sector peers.

According to Cook, Deere’s performance in the current farm equipment downturn demonstrates that its earnings and margins are structurally higher than in past cycles, and the company remains on track to meet its 2030 through-cycle margin target of 20%.

She projects that 2025 will likely mark the bottom of the farm equipment cycle, with a potential upturn in 2026. Cook also believes the market often underestimates Deere’s operating leverage during cyclical recoveries.

Price Action: DE stock is trading higher by 1.64% to $486.67 at last check Friday.

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