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Deere (DE): Reassessing Valuation After Mixed Q4 2025 Results and Softer 2026 Profit Outlook

Simply Wall St · 1d ago

Deere (DE) just delivered one of those mixed quarters that keeps investors on their toes: higher Q4 2025 revenue, lower net income, and a softer 2026 profit outlook thanks to rising tariffs and costs.

See our latest analysis for Deere.

Despite the cautious 2026 outlook, investors have not abandoned the story. The share price is $481.82 and the year-to-date share price return of 15.22% signals steady but not explosive momentum, while a 5-year total shareholder return of 101.70% shows the long-term thesis is still very much intact.

With tariffs, guidance, and boardroom moves all in play, this is also a good moment to look beyond Deere and see what else the market is rewarding, starting with aerospace and defense stocks.

With the stock trading at a modest discount to analyst targets and a larger gap to some intrinsic value estimates, the key debate now is simple: is Deere quietly undervalued or is the market already pricing in its next leg of growth?

Most Popular Narrative Narrative: 8.4% Undervalued

With Deere last closing at $481.82 against a narrative fair value near $525.78, the story leans toward hidden value, not peak optimism.

Rapid adoption of Deere's precision agriculture and automation solutions (e.g., JDLink Boost, Precision Essentials bundles, See & Spray tech, and new automation features) is driving higher-value product sales and increased software engagement globally, positioning Deere to benefit from shifts toward high-efficiency, technology-enabled farming; this should lift both future revenue and net margins through higher-margin recurring software and data services.

Read the complete narrative.

Curious how modest top line expectations can still support a higher value? The narrative leans on richer margins, stronger earnings power, and a surprisingly ambitious profitability trajectory. Want to see the exact set of assumptions that make this math work?

Result: Fair Value of $525.78 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, sharply higher steel tariffs and a deeper, longer downturn in North American large ag demand could quickly undermine those margin and earnings assumptions.

Find out about the key risks to this Deere narrative.

Build Your Own Deere Narrative

If you see the story differently or want to stress test these assumptions with your own inputs, you can build a full narrative in minutes: Do it your way.

A great starting point for your Deere research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

Before you move on, put Deere in context by lining it up against fresh opportunities our stock screeners are surfacing across income, growth, and innovation themes.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.