Deere: Q2'26 Review: Ag. Cycle Views Unchanged, C&F Strength Leads Through FY26

Research evidence excerpt

Deere: Q2'26 Review: Ag. Cycle Views Unchanged, C&F Strength Leads Through FY26

Equity Research

U.S. Machinery & Construction

21 May 2026

Deere

Q2'26 Review: Ag. Cycle Views

Unchanged, C&F Strength Leads

DE OVERWEIGHTThrough FY26

Unchanged

Large Ag still tracking to a FY26 trough while Small Ag has U.S. Machinery & POSITIVE Construction

Unchangedimproved. Inventory normalization and early ’27 commentary

supports a bottom. C&F remains key upside, with Price Target USD 640.00 Unchanged

roadbuilding mix tailwind. Underlying EPS ~$20 (ex-tariffs), Price (20-May-26) USD 560.46

Potential Upside/Downside +14.2%with ~$40+ longer-term earnings potential.

Source: Bloomberg, Barclays Research

Deere reaffirmed its view that the large ag cycle is bottoming in 2026. Our “balanced bull”

Market Cap (USD mn) 151384

sector thesis is predicated on a trough that’s shorter cycle on cycle. Our Deere thesis

Shares Outstanding (mn) 270.11

includes upside from non-large ag parts of the portfolio (i.e., C&F, analysis here). Both

Free Float (%) 92.53

remain undisturbed and/ or enhanced despite ’26 estimates being unchanged. Deere’s

52 Wk Avg Daily Volume (mn) 1.4

outlook is underpinned by portfolio diversification and stronger execution in Small Ag & Turf

Dividend Yield (%) 1.22

and C&F, partially offset by continued pressure in Large Ag. The company reiterated that FY26 is

Return on Equity TTM (%) 18.51

expected to mark the bottom of the ag cycle, with equipment operations revenue growing ~5%

Current BVPS (USD) 101.46

y/y despite Large Ag operating below trough levels. Order visibility remains supportive in North Source: Bloomberg

America where large tractor orders extend well into 4Q, and while '27 EOPs are just beginning,

early indications are positive and point to 2026 being the trough.