Deere Hits Record Highs but Analysts Say the Rally’s Gone Too Far

While CaterpillarCAT

rode data centers to a 120% gain in the past year, DeereDE

sat in the fields — until now. After lagging throughout 2025, the latter’s shares surged 33% YTD, closing the gap amid breakout earnings and rebounding sales. Moreover, CEO John May raised guidance, calling 2026 “the bottom” for the industrial machine maker’s tariff-battered clients.

• His optimism comes as China resumes soybean purchases and new government-funded programs provide farmer support — with biofuel clarity set to boost feedstocks demand.
• Management projects construction and small-agriculture units to grow by 15% each — fueling investor bets that autonomous equipment & software will boost margins.

Not so fast: Amid the run-up, Jefferies downgraded $DE to Sell this week, noting shares now trade at 34x forward earnings (vs. 24x last year). For a company that’s posted nine straight quarters of volume declines, the analyst argues this rally prices in a recovery that hasn’t arrived. Deere’s biggest segment, large agriculture, is still projected to be down 5-10%, and even peers don’t expect a turnaround until 2027. May’s calling the bottom while the data suggests the tractor’s still stuck in the mud.