Deere & Co. Time to Focus on FY27; Raising Dec 26 PT to $560

研报英文原文证据摘录

Deere & Co. Time to Focus on FY27; Raising Dec 26 PT to $560

USD as incremental margin pressure for growers,

and expects cautious market behavior through the remainder of FY26. In Asia, DE

projected industry sales roughly flat YoY, mainly driven by modest improvement in India.

• Construction demand remained robust, supported by infrastructure, rental

replacement, data centers, and share gains. DE described supportive C&F

fundamentals, including healthy customer backlogs tied to infrastructure and large

project spending that more than offset softness in residential construction, while calling

out global road building markets expected to grow ~10% YoY. The C&F order book

strengthened more than 60% since November and is now at its highest level since April

2024, with over 80% of production slots filled for the year, and lapping prior-year

underproduction in earthmoving, especially early last year, is contributing to FY26

shipment momentum as production normalizes toward retail demand. DE also described

C&F share gains over the past 12 months, particularly in the last 6 months, and linked

improved share performance in part to pricing adjustments made late last year. Following

Conexpo 2026, nearly all production slots for the new DE excavator are already spoken

for, and management cited customer confidence that incremental demand could extend

into 2027, supported by data center construction expected to exceed $100B in 2026 with

additional DD% growth into 2027, alongside ongoing activity tied to IIJA, oil and gas,

and warehousing.

• Tariff refunds lifted 2Q margins, while FY26 tariff exposure remained a material

headwind. DE recognized a recovery of $272MM related to IEEPA tariff refund claims,