Deere: Meeting Takeaways From The Road: Trough Visible, Recovery Debated

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Deere: Meeting Takeaways From The Road: Trough Visible, Recovery Debated

at contributes to its 2030 mid-cycle

earnings views. Construction is at 100% of mid-cycle and better positioned in 2026 with

inventories low and lead times high (4-5 months vs. 2-3 months where they want). There could

be an opportunity to stock up dealers’ rental fleets and a long-term opportunity to grow market

share as the excavator platform rolls out. The company seems to be implying a long tail (i.e.

ramp) for excavators but also potential international expansion (organically and/or

inorganically) without the Hitachi encumbrance. The company is positive on the potential for

Tenna (small revenue, $50mn) in that it enables a construction equipment platform for

customers but also with a distinct sales force, which is unique. Wirtgen remains a stable

business. Typical up/downs are +/- 5%.

Other takeaways: 1) We’d expect the company to update for tariffs in August post Sec. 232’s

reduction to 15% and balancing out 301s on what they become. The company sees 232 as sticky

and is seeking permanent cost mitigants. USMCA negotiations could have undetermined

implications on the industry. 2) China has significant market share in certain markets and

produces low cost equipment. Peers like CAT, Volvo, Komatsu make good equipment. Part of the

reason Deere’s innovating is because to compete against their peers it demands it. 3) Pricing

remains slightly positive in Brazil and margins are DD’s positive. That’s well above peers like

AGCO that are DD negative. Deere’s former CFO Jepsen spoke to SA profitability at our Miami

conference in 2025, which tracks with the above. 4) We’re watching out for corn acreage shifts

between SA and US based on weather and policy (El Nino and E15). 5) AI could make ag