$Deere(DE)$’s August 20 results will test whether construction equipment and smaller machinery can continue offsetting weak demand for large tractors and combines. Investors have increasingly treated 2026 as the bottom of the agricultural cycle, but farmer economics have not yet provided clear confirmation.
Deere & Company logo with Industrials background
Deere reported its fiscal second quarter, ended April 26, on May 21. Net sales and revenue increased 5% to $13.37 billion, while earnings reached $6.55 per share. Production and Precision Agriculture sales fell 14% to approximately $4.5 billion. In contrast, Construction and Forestry sales increased 29% to $3.79 billion, and Small Agriculture and Turf rose 16% to $3.49 billion.
Management maintained expected fiscal-2026 net income of $4.5–$5.0 billion. It raised projected Construction and Forestry sales growth to 20% from 15%, partly reflecting data-centre and infrastructure construction. Reuters’ May 21 results analysis explains why the strong quarter did not produce higher total profit guidance.
The bullish case is that Deere deliberately reduced production and dealer inventory during the downturn, limiting excess machines that could delay a recovery. Its precision-agriculture software, autonomous functions and installed equipment base create service and technology revenue in addition to new-unit sales. If crop economics stabilise, ageing fleets and lean inventories could translate quickly into orders.
The bearish case is that large equipment remains constrained by low crop prices, elevated input expenses and borrowing costs. Deere’s second-quarter earnings also benefited from a $272 million tariff refund, while tariffs remain a material manufacturing cost. Construction is cyclical too: AI-related projects are supportive, but housing, commercial building and infrastructure budgets can weaken.
Deere closed at $608.85 on August 14, down 0.6%, after trading between $607.74 and $615.99. Approximately $607–$609 is immediate support, while $616 followed by $620 is resistance. The shares have already recovered substantially from their post-May-results decline, suggesting that some cyclical improvement is priced in. Deere’s official event page confirms the August 20 call.
The evidence leans neutral to moderately bullish. Construction and smaller equipment are performing well, but large agriculture has not confirmed a recovery. The view would become more bullish if production-agriculture orders and dealer inventories improve together; it would be invalidated by further large-equipment weakness, lower annual guidance, renewed inventory accumulation or tariff costs overwhelming productivity gains. This is personal opinion for education and is not financial advice.
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Disclaimer: This article is for informational and educational purposes only and does not constitute financial, investment, or trading advice. The views expressed are personal opinions based on publicly available information and are subject to change without notice. Investors should conduct their own research and consider their financial situation, risk tolerance, and investment objectives before making any investment decisions. I do not guarantee the accuracy or completeness of the information presented.
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