Deere Q1 Sales Jump 17.5% While Tariffs Squeeze Margins, Targets Raised
Deere & Co’s fiscal Q1 net sales rose 17.5% year-over-year, with Small Ag and Turf up 24.0% and Construction and Forestry up 33.9%, while operating margins slid 184 basis points to 5.9% due to $1.2 billion in tariffs. The company lifted its 2026 guidance, triggering analyst price target increases to $672–$793.
1. Q1 Results and Outlook
Deere posted fiscal Q1 net sales up 17.5% year-over-year and modestly raised its fiscal 2026 guidance, citing a potential cycle trough and setting the stage for accelerated growth.
2. Segment Performance
Sales gains were driven by Small Ag & Turf, which climbed 24.0%, and Construction & Forestry, up 33.9%, while Production & Precision Ag grew 3.1%, supported by higher shipment volumes and favorable foreign exchange.
3. Margin Impact from Tariffs
Operating margins fell by 184 basis points to 5.9%, reflecting about $1.2 billion in direct tariff expenses, partially offset by productivity improvements and cost management measures.
4. Analyst Response
RBC raised its price target to $736 and reiterated an Outperform rating, while UBS, Truist and Bank of America lifted forecasts into a $672–$793 range on improving earnings visibility and recovery prospects.