Al Root
Deere stock jumped after the farm-equipment maker reported better-than-expected fiscal first-quarter earnings and raised fiscal-year guidance.
The company Thursday reported earnings per share of $2.42. Wall Street was looking for about $2. Deere raised its fiscal 2026 net income guidance to $4.5 billion to $5 billion. The prior range given in November was $4 billion and $4.75 billion.
Shares rose 4% at $617.10 in premarket trading.
This is breaking news. Check back for updates. Read a preview of Deere's earnings report below.
Deere reports its fiscal first-quarter earnings on Thursday morning. Along with all the earnings, growth, and profit metrics investors track, they will want to hear more about the health of the U.S. farming economy.
The agricultural economy is better than it was, but it isn't the picture of health that Deere shareholders would prefer.
For the quarter, Wall Street is looking for Deere to report earnings per share of about $2, driven by $5.1 billion in farming machinery sales. A year ago, Deere reported earnings per share of $3.19 from farm equipment sales of $4.8 billion.
An earnings or sales beat would be nice, but the fiscal first quarter is typically the seasonally weakest of the year for Deere.
Guidance should matter more to investors. In November, Deere management said fiscal year 2026 net income should land between $4 billion and $4.75 billion. Wall Street projected income of $5.3 billion at the time. Deere earned about $5 billion in net income in fiscal year 2025.
Deere stock fell almost 6% after November earnings. Still, ahead of the first-quarter earnings report, shares have gained almost 30% since the initial guidance disappointment.
Investors are pricing in improvement. "2026 will mark a cyclical bottom in North American Large Ag equipment demand with volumes set for multi-decade lows," wrote Baird analyst Mig Dobre in a recent report.
A bottom is good. Still, he fears investors might be too aggressive in forecasting a recovery. Farmers aren't breaking even on corn and soybeans at current prices, according to his math. Dobre would feel better about the sector with higher crop prices, but notes that higher government payments will boost farm incomes in 2026.
There are a lot of moving parts for farmers this year. Investors will hear about all of them from Deere on Thursday. Investors have had a preview of what Deere might say, reacting relatively well to updates from Deere peers.
AGCO stock jumped 2.2% after it reported better-than-expected fourth-quarter earnings on Feb. 5. It also said earnings per share for 2026 should land at about $5.75. Wall Street projected about $5.80 at the time.
CNH Industrial stock jumped 2.7% after it reported better-than-expected fourth-quarter earnings on Feb. 17. Its guidance, however, was a little weaker than AGCO's. CNH management expects 2026 earnings per share of about 40 cents. Wall Street was closer to about 50 cents.
Still, the CNH quarter was good enough for investors who believe a cyclical bottom in the agricultural business is in. Wall Street essentially expects stable agricultural sales for the U.S. players in 2026 after two consecutive years of decline.
Investors will seek to know if Deere can justify that belief in a cyclical bottom when it reports quarterly results.
Write to Al Root at allen.root@barrons.com
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February 19, 2026 06:26 ET (11:26 GMT)
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