Citigroup Sees $0.10-$0.15 EPS Boost for Deere After Tariff Cut
C•Citigroup says Trump's cut of agricultural-equipment tariffs from 25% to 15% could boost Deere’s fiscal 2026 EPS by $0.10-$0.15 and bring a larger tailwind to CNH Industrial and AGCO. Deere, CNH and AGCO shares rose about 5%, over 9% and 5%, respectively, after the reduction.
1. Analyst Outlook
Citigroup characterizes the reduction of agricultural-equipment tariffs from 25% to 15% as an incremental positive for the farm machinery sector, noting a more material benefit for firms that import a higher share of finished goods.
2. Earnings Impact Estimates
The tariff cut is projected to add between $0.10 and $0.15 per share to Deere’s fiscal 2026 earnings, with CNH Industrial and AGCO expected to see an equal or greater EPS boost due to their import profiles.
3. Stock Market Reaction
On the day of the tariff announcement, Deere shares climbed roughly 5%, CNH Industrial shares jumped over 9%, and AGCO shares gained about 5% as investors priced in the improved margin outlook.
4. Tariff Adjustment Details
The tariff reduction applies to combines, harvesters and other mobile industrial equipment, lowering duties to 15% through December 31, 2027, and extends a 10% duty rate for machinery using at least 85% U.S.-melted steel or aluminum.
