Deere & Co. shares have fallen below a key support level📉 Is the business losing momentum?

Deere & Company (DE.US) is one of the largest American industrial firms and one of the last major companies to report earnings for the most recent quarter, which for Deere corresponds to the fourth fiscal quarter of 2025. The company finished the fiscal year on a strong note, delivering results that exceeded market expectations across nearly every key category. Deere reported higher-than-expected earnings per share and significantly stronger revenue, confirming that its technological innovations and improvements in operational efficiency are now visibly translating into financial performance. At the same time, the market reaction showed that beating consensus is not enough to dispel concerns about the industry’s outlook for the coming years.

• The company exceeded expectations for both revenue and earnings per share in the fourth quarter.
• Despite strong results, the stock fell more than 5 percent yesterday.
• Revenue increased 11 percent year over year, driven by product innovation and improved process organization.
• In 2026 the company expects a clear decline in demand for large agricultural machinery.

Fourth-Quarter Results

Deere generated 12.4 billion dollars in revenue during the final months of the year, an increase of 11 percent compared to the same period a year earlier. The company also reported 1.1 billion dollars in net income and an operating margin of 12.6 percent in its equipment operations division. It is worth noting that the improvement is visible both on the sales side and in cost control.

• Revenue: 12.4 billion USD, up 11 percent year over year.
• Earnings per share: 3.93 USD vs. the 3.85 USD forecast.
• Net income: 1.1 billion USD.
• Equipment operations margin: 12.6 percent.

The company beat analyst expectations on both revenue and earnings per share. Revenue exceeded market estimates by more than 26 percent, marking one of the largest positive surprises in recent quarters. This strong result reflects consistent investment in technology, including precision agriculture solutions, as well as better inventory management.

Despite the strong figures, investors focused primarily on the outlook for 2026, which points to a potentially challenging environment. A projected decline in demand for large agricultural machinery of 15 to 20 percent in the United States and Canada weighs on short-term optimism regarding future performance.

For 2026, the company forecasts:

• Net income between 4.0 and 4.75 billion dollars.
• An effective tax rate of 25 to 27 percent.
• Cash flow from equipment operations of 4 to 5 billion dollars.
• A 15 to 20 percent decline in demand for large agricultural machinery.

These projections clearly show that the coming year will test the industry’s resilience, and Deere will need to adapt to weaker market conditions. Company representatives highlighted record profitability at this stage of the cycle. Chris Seibert from the investor relations department emphasized that the company delivered more than 5 billion dollars in net profit, the best result in its history at a comparable cyclical point. Deanna Kovar from the Agriculture and Turf segment pointed to the growing role of autonomous systems, which the management team views as one of the key competitive differentiators in the coming years. Risks involve:

• Possible tariff impacts estimated at 1.2 billion dollars before tax.
• Projected decline in demand for large agricultural machinery in 2026.
• Macroeconomic risks and slowing global growth momentum.
• Potential supply disruptions and logistics bottlenecks.
• Increasing competition in precision agriculture technologies.

Deere & Co. (DE.US) Chart Overview

Deere shares fell below the key 200-day EMA (red line), signalling a return to a medium-term downward trend. A potential bearish head-and-shoulders pattern has formed, with the neckline near 430 USD per share. A move back toward 480 USD could invalidate the pattern and open the door for a rebound.

Source: xStation5