Deere & Co: Solid F3Q26 Results; Not Caught in the Headlights, Reiterated CY26 Ag-Equipment Cycle Trough Expectation

Research evidence excerpt

J P M O R G A N

North America Credit Research

20 August 2026

Deere & Co

Solid F3Q26 Results; Not Caught in the Headlights,

Reiterated CY26 Ag-Equipment Cycle Trough

Expectation

Table 1: DE F3Q26 Earnings Summary

F3Q26

Actual

Consensus

Beat/Miss %

F3Q25

Y/Y % Change

Revenue

$12,608

$12,256

3%

$12,018

5%

Operating Profit

$1,856

$1,623

14%

$1,568

18%

% margin

14.7%

13.2%

$mm

Consolidated

13.0%

Capex

$265

$375

-29%

$297

-11%

FCF (CFO - capex)

$1,943

$1,832

6%

$2,599

-25%

Revenue

$11,339

$10,784

5%

$10,680

6%

Operating Profit

$1,585

$1,404

13%

$1,302

22%

% margin

14.0%

13.0%

Equipment Operations Capex

$263

$159

65%

Equipment Operations FCF

$2,069

$2,134

-3%

Total Debt

$9,324

$9,250

Estimated Liquidity

$12,709

$13,031

0.3x

Revenue

$1,505

$1,423

6%

$1,505

0%

Operating Profit

$271

$262

4%

$266

2%

% margin

18.0%

18.4%

Equipment Operations

Net Leverage

12.2%

Financial Services

17.7%

Source: Company reports, Bloomberg Finance L.P.

SUMMARY:

Solid F3Q26 results. Deere reported revenue of $12.61 billion, above the

$12.26 billion consensus, operating profit of $1.86 billion, above $1.62 billion

consensus (14.7% margin v. 13.2% consensus), and consolidated free cash

flow of $1.94 billion, above the $1.83 billion consensus. Excluding the $110

million tariff recovery, operating profit of $1.75 billion still exceeded

consensus, and implied margins of 13.8% could have also exceeded consensus.

Deere raised FY26 implied Equipment Operations free cash flow guidance by

$350 million to $3.95 billion, driven by $250 million of higher operating cash

flow and $100 million of lower capex.

POSITIVES:

Clean operating profit and margin outperformance, only partly explained

by additional tariff recoveries. Operating profit of $1.86 billion exceeded

$1.62 billion consensus by $233 million, with the 14.7% margin nearly 150bp

above consensus (13.2% consensus). Stripping out the $110 million tariff

recovery, operating profit of $1.75 billion still exceeded consensus by $123

million, with a 13.8% margin. Small Ag & Turf and Construction strength

helped offset weakness in Production and Precision Ag. Small Ag & Turf sales

increased 12% y/y to $3.38 billion (v.…