Deere fiscal 2Q26 initial thoughts

Research evidence excerpt

Deere fiscal 2Q26 initial thoughts

Industrials | Machinery

May 21, 2026

David Raso Deere fiscal 2Q26 initial thoughts

212-446-5647 • Stock Reaction – Modestly Negative: A Fiscal 2Q26 “Beat

david.raso@evercoreisi.com (though quality a bit light) and Maintain” slightly

Oliver Liao disappointing (Street slightly ahead of that maintained guide);

212-446-9444

IEEPA refunds/tax rate help to 2Q & that upside at oliver.liao@evercoreisi.com

construction and small ag, not large ag (was some hope could

Jeff Morrison

DE bump up large ag outlook at least slightly but no) keeps 212-446-5652

jeff.morrison@evercoreisi.com stock at bay

• We’ve been cautious to get behind ag cycle, last week’s

proprietary fieldwork suggested that remained prudent stance

& grain prices just haven’t reacted quite as positively as you’d

expect to some fairly meaningful positive

developments/potential developments).

• Slightly Less Improved 2Q Price Than Expected (in fact

lowered full yr guide for price at each Large Ag & Small Ag)

But Price-Cost Better In 2Q Than Expected Due To IEEPA

Refunds

• The Stock: DE stk at 31x+ 2026 implied EPS guide of $17.50+ in

isolation not that problematic if Large Ag was showing a spark

given Large Ag key US cycle’s “kindling wood” is dry (inventories

lower, fleet is aged after yrs of weakness, etc) but grain prices just

not as strong as needed to believe that 31x ’26 P/E is really just,

say, <25x ‘27 P/E while, for example, on my Street-high CAT ests,

despite stk’s strong outperformance vs DE, is trading at 25x ‘27

with much better visibility. I’m intrigued US Large Ag cycle can

get that spark but not quite there (US crop closer to pollination

period soon & war developments will add clarity)

• Guide: Maintained Net Income Midpoint Of $4,750m (range