Deere's Resilience Shines Through Tariffs, Analysts Raise Price Forecasts

Several analysts raised the price forecast for Deere & Company DE following the second-quarter results reported on Thursday.

The company reported net sales and revenue fell 16% year-over-year to $12.76 billion, topping the consensus estimate of $10.79 billion.

The company expects FY25 net income to be between $4.75 billion and $5.5 billion (prior $5 billion and $5.5 billion).

Raymond James analyst Tim Thein raised the price forecast from $530 to $560 while keeping an Outperform rating.

Also Read: Green Light For Deere: Analyst Sees Growth Ahead Despite Tariff Concerns

The analyst revised the model to incorporate the stronger-than-anticipated second-quarter operating results and the inclusion of approximately $400 million in tariff-related costs anticipated for the second half of the year.

Thein notes that the largest segment, Production & Precision Agriculture (PP&A), is expected to experience the smallest direct percentage impact from these tariffs.

This highlights DE’s highly vertically integrated structure and sourcing approach, which likely contributes to its strong relative competitive standing in North America, adds the analyst.

The analyst says the most surprising aspect of the recent quarter and outlook is the PP&A margin guidance for the second half of 2025.

The analyst noted that while the roughly $100 million impact from tariff-related costs was a new factor, and they acknowledged the headwind related to geographic mix (partially due to Europe’s volumes exceeding those of North America), they believed the implied decremental margin assumption of around 80% would ultimately prove to be conservative.

Thein lowered FY25 EPS estimates to $19.25 from $19.80, as the positive impact of the stronger second-quarter operating performance is more than offset by reduced margin assumptions for the second half of the year.

DE Davisdon analyst Michael Shlisky maintained the Buy rating with a price forecast of $542.

The analyst writes that Deere’s production and Precision Ag revenues beat their estimates by around 6%, boosting the mix and leading to Equipment operating profit of around 10% above their forecast.

While guidance at the low-end was slightly widened (common amid tariff uncertainty), cash flow projections remained stable, adds the analyst.

The analyst continues to see Global Ag as relatively less risky than discretionary sectors, and DE’s strong execution could maintain its leadership.

Investors can gain exposure to the stock via iShares MSCI Agriculture Producers ETF VEGI and Global X AgTech & Food Innovation ETF KROP.

Price Action: DE shares are trading higher by 3.19% to $532.78 at the last check on Friday.

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