Oppenheimer reiterates Deere stock rating after earnings beat

Oppenheimer maintained an "Outperform" rating for Deere & Company (NYSE:DE) after the company reported strong fiscal third-quarter results. Deere surpassed expectations with a rise in fiscal 2026 net income guidance, aligning with market consensus. The Production and Precision Agriculture segment outperformed on both revenue and margins, with tariff recovery contributing to margin benefits.

The Small Agriculture and Turf segment also met expectations, driven by volume and mix improvements. Construction and Forestry results were in line with forecasts, although operating expenses were slightly higher. The updated guidance reduced the Production and Precision Agriculture segment outlook by 10%, primarily due to revised EU and South America industry assumptions.

Small Agriculture and Turf margin guidance was raised. Deere will report fiscal third-quarter 2026 earnings on August 20, with JPMorgan lowering its price target from $590 to $570 due to order trend concerns. Meanwhile, DA Davidson reaffirmed a Buy rating and maintained a $685 price target. Jefferies reported a decline in agricultural equipment sales, with tractor sales falling 10.6% year-over-year and large tractors decreasing by 5.6%.

Combine sales dropped by 65% year-over-year in July. Used farm equipment pricing remains challenging, with large late-model tractors down 1.3% month-over-month. Options data indicates Deere's stock may move by 5% following the earnings release, as the company has historically surpassed options-implied moves in prior announcements.