RBC Capital analyst Sabahat Khan initiated coverage on Deere & Company (NYSE:DE) with an Outperform rating and announced a price target of $542.
Analyst View
Khan writes that Deere has successfully used its market position and scale to spearhead the industry’s shift toward tech-enabled agriculture.
Over the medium term, the analyst anticipates that the broader adoption of Deere’s technology-enabled offerings will help reduce its reliance on the traditional agricultural cycle.
Furthermore, significant investment in R&D has created a comprehensive suite of data-enabled offerings, according to the analyst.
Khan notes that increasing customer adoption of this hardware and connectivity strengthens Deere’s competitive moat, locks farmers into its ecosystem, and gradually reduces the cyclicality of its earnings.
The analyst’s rating reflects the expectation that 2025 marks the trough of the cycle, with improved results and sentiment expected throughout 2026.
Khan estimates adjusted EPS of $18.53 for 2025 and $20.86 for 2026.
Recent Earnings Results
In August, the heavy machinery maker reported third-quarter earnings per share of $4.75, beating the consensus of $4.67. It witnessed a 9% decline in quarterly sales to $12.02 billion, beating the consensus of $10.31 billion.
At that time, Deere narrowed its fiscal 2025 net income guidance to between $4.75 billion and $5.25 billion, compared to its previous forecast of $4.75 billion to $5.50 billion, citing that customers remain cautious amid ongoing uncertainty.
Investors can gain exposure to the stock via iShares MSCI Agriculture Producers ETF (NYSE:VEGI) and Global X AgTech & Food Innovation ETF (NASDAQ:KROP).
Price Action: DE shares are up 1.59% at $467.13 at the last check on Wednesday.
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