Jefferies Sees Limited Downside for Deere After 15% Pullback, Keeps $550 Target
Jefferies upgraded Deere & Company to Hold after its shares fell 15%, saying limited downside remains with the stock near its unchanged $550 price target. The firm forecasts peak-cycle record earnings, with revenues rising 75% from the 2026 trough driven by 65% volume growth, 10% pricing and 35% incremental margins.
1. Jefferies Upgrade and Share Pullback
Jefferies upgraded Deere & Company from Underperform to Hold after a roughly 15% decline from mid-February highs, with shares now trading near the firm’s unchanged $550 price target.
2. Peak-Cycle Earnings and Growth Outlook
The firm projects record earnings at the next cycle peak, forecasting 75% revenue growth from the 2026 trough driven by 65% volume increases, 10% pricing gains and 35% incremental margins on equipment sales.
3. Extended Equipment Sales Trough
February marked the 30th consecutive month of negative North American high-horsepower equipment sales, with volumes down over 40% from the 2023 peak and another 10–15% decline expected in fiscal 2026.
4. Farmer Economics and Macro Risks
USDA projects farm incomes to fall about 15% in 2026, while elevated input costs, trade volatility, debt levels and potential fertilizer price spikes from geopolitical tensions could delay a recovery.