To The Moon

$Deere(DE)$ fiscal Q4 2025 earnings, scheduled for release Wednesday, November 26, 2025, before the market opens.

Consensus Estimates Summary

Wall Street expects a year-over-year decline in both revenue and profit, reflecting the ongoing normalization in the agricultural cycle and lower crop prices.

Since the market already expects a "bad" quarter (double-digit declines), a simple "beat" on these numbers might not send the stock higher. The stock's reaction will depend almost entirely on the Fiscal 2026 Guidance. If Deere guides for 2026 revenue to be flat or only down single digits, the stock will likely rally; if they guide for another >10% drop, the sell-off could be sharp.

The Big Picture: Deere approaches this report with a "high stakes" setup. Competitors like $AGCO Corp(AGCO)$ and $CNH Industrial N.V.(CNH)$ Industrial have recently reported significant North American weakness and inventory gluts. While Deere often outperforms peers due to its premium branding and tech stack, the market is pricing in a volatile reaction (approx. ~7.8% implied move). The critical focus will not be on Q4 numbers, but on Fiscal 2026 guidance—specifically whether management sees a bottom forming or predicts continued contraction.

Deere & Company (DE) released its fiscal Q3 2025 earnings on August 14, 2025, reporting a 26% drop in net income and a 9% decline in net sales compared to the prior year. Despite the year-over-year decrease, the company's results surpassed analysts' expectations for the quarter. 

Summary of Q3 2025 Earnings

Segment Performance Highlights:

Production and Precision Agriculture: This largest segment saw a 16% decline in net sales and a 50% drop in operating profit, primarily due to lower shipment volumes and an unfavorable sales mix.

Small Agriculture and Turf: Net sales decreased by only 1%, with operating profit falling 2%, showing more resilience than other equipment divisions.

Construction and Forestry: Net sales declined by 5%, while operating profit plummeted 47%, impacted by lower demand and tariff-related production costs.

Financial Services: This was the only segment to show growth, with net income increasing by 34%, driven by a lower provision for credit losses. 

Lesson Learnt from the Guidance

The primary lesson from Deere's guidance is that while operational efficiency and technological innovation can mitigate some headwinds, the company remains highly susceptible to macroeconomic pressures and agricultural market cycles. 

Market Volatility is Key: Despite beating Q3 estimates, Deere's stock dropped sharply (over 7% in pre-market trading) after the report due to investor focus on the company's cautious outlook and broader market concerns. This highlights that in cyclical industries, future guidance often outweighs past performance in influencing stock movement.

Agricultural Downturn Persists: The guidance reiterated expectations for a significant industry downturn in North American large agricultural equipment sales (projected to decline approximately 30% for fiscal year 2025). This is driven by factors such as lower commodity prices, high interest rates, and trade uncertainties.

Strategic Resilience is Crucial: Management emphasized resilience through disciplined inventory management, the growth of high-margin precision agriculture technologies (like "See & Spray"), and global diversification. The ability of the Financial Services segment to provide stable income also helps balance the cyclical equipment sales.

Be Cautious Amid Uncertainty: Deere narrowed its full-year 2025 net income guidance range to $4.75 billion to $5.25 billion (from a previous midpoint of $5.15 billion), signaling caution. The lesson for investors and management alike is to maintain financial discipline and prepare for ongoing volatility, even when a "bottom" in the cycle (expected in 2025) seems near.

Key Metrics Investors Should Watch

The headline EPS and Revenue numbers matters less than the quality of those earnings and the forward outlook. Focus on these four specific areas:

A. The "2026 Guide" (The Market Mover)

Why it matters: Investors are already writing off 2025. The stock price today reflects expectations for the next cycle.

What to watch: Look for the net sales forecast for 2026.

• Bull Case: Guidance flat to slightly down (0% to -5%), signaling the cycle trough is here.

• Bear Case: Guidance down -10% or more, indicating "de-stocking" will continue deep into next year.

B. North American Large Ag Sales & Order Books

• Context: Competitor AGCO recently reported a ~32% drop in North American sales. CNH Industrial saw Ag sales down 10%.

• The Deere Specific: Watch the "Production & Precision Ag" segment. Are farmers canceling pre-orders for large tractors/combines? High interest rates and lower crop prices have likely frozen capital expenditure for many large operators.

C. Used Equipment Inventory Levels

• The Hidden Risk: There is currently a glut of "late-model" used equipment (1-3 years old) on dealer lots. When used inventory is high, it cannibalizes new equipment sales because the price gap between "new" and "slightly used" widens.

• Metric: Listen for commentary on "dealer inventory levels" vs. "target ranges." If inventories are still "above target," expect production cuts (and lower margins) in 2026.

D. Pricing Power vs. Incentives

• The Trend: For the last 3 years, Deere raised prices to beat inflation. That power is fading.

• Watch For: Evidence of "incentive spending" or discounts. If Deere has to discount to move metal, their industry-leading operating margins (typically ~20%+) will compress rapidly.

2. Competitor Read-Throughs (Leading Indicators)

Recent earnings from peers give us a cheat sheet for what to expect from Deere:

Deere (DE) Price Target

Based on 22 analysts from Tiger Brokers app offering 12 month price targets for Deere in the last 3 months. The average price target is $516.82 with a high forecast of $609.00 and a low forecast of $440.00. The average price target represents a 6.07% change from the last price of $487.23.

Trading Opportunities (Short-Term)

Implied Volatility: The options market is pricing in an approx. 7.8% move post-earnings. This is higher than average, reflecting uncertainty.

Scenario A: The "Beat but Weak Guide" (High Probability)

• The Setup: Deere beats Q4 EPS estimates due to cost cuts, but issues soft 2026 guidance citing "inventory management."

• Market Reaction: Knee-jerk lower. Recent history (like CNH) suggests investors sell into weakness.

• Trade Idea: Bear Call Spreads (selling upside calls) or Long Puts if you are aggressive. The risk is that Deere announces a massive buyback to support the stock, which they have done before.

Scenario B: The "Kitchen Sink" Low (Contrarian)

• The Setup: Deere guides for a painful 2026 (lowering the bar drastically) but claims this is the "bottom."

• Market Reaction: The stock might initially tank but then reverse aggressively higher ("Sell the rumor, buy the news") as long-term funds step in.

• Trade Idea: Wait for the initial 30-minute flush after the open. If the stock stabilizes, look for Long Call Spreads targeting a recovery over the next 2-4 weeks.

Scenario C: The Volatility Play (Neutral)

The Setup: You expect a big move but are unsure of the direction.

Trade Idea: A Long Straddle/Strangle is expensive right now due to high implied volatility (IV). A better approach might be an Iron Condor if you believe the move is overstated, but given the 7.8% implied move, a directional bias is usually safer than betting on neutrality here.

If you are a short-term trader, caution is advised. The pattern from competitors suggests that "good news" (beating EPS) may be treated as "bad news" if the revenue quality is low.

Technical Analysis - Exponential Moving Average (EMA)

Though we are seeing a nice upside recovery from Deere in last two trading session, but RSI momentum remains in the negative zone, and market is looking at whether Deere could succeed in navigating persistent industry downturns like its peers who have reported their earnings.

If Deere could show their resilience, then we might see a nice short term rally if Deere manage to provide estimate beat from its earnings, and whether that could signal the industry turnaround, would very much depends on whether Deere would be adjusting its FY 2025 outlook/forecast upwards.

Summary

Deere & Company is expected to report a decline in earnings for its fiscal Q4 2025 results on November 26, 2025, driven by weak farmer spending and broader agricultural and construction market softness. The Zacks Consensus Estimate projects earnings per share (EPS) of $3.96, a 12.9% drop year-over-year. Revenue, however, is anticipated to increase by 7.7% year-over-year to $9.99 billion, potentially buoyed by price realization offsetting lower shipment volumes. 

Analysts are focused on Deere's ability to navigate persistent industry downturns, with expectations of a significant decline in North American large agricultural equipment sales for the full year. Management has proactively adjusted production to align with demand and focused on high-margin precision agriculture technologies. The company has also been managing inventory and relying on its Financial Services segment for stability. 

Despite a solid track record of beating earnings estimates, some analysts predict a miss this quarter due to ongoing market pressures and cost inflation. Investor sentiment remains cautious, and the focus will be on the company's commentary regarding future market conditions and its technology-driven growth strategy. The upcoming report will be a key indicator of Deere's resilience amid ongoing macroeconomic headwinds.

Appreciate if you could share your thoughts in the comment section whether you think Deere would be able to navigate the persistent industry downturns, and show resilience in upcoming earnings report.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire @MillionaireTiger appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.