Can Deere & Company Stock Boost Growth Beyond 8% by 2026?
Deere & Company has been at the forefront of agricultural technology, with a significant transformation impacting its business model. The question remains: Can Deere & Company stock boost growth beyond 8% by 2026?
Solid Financial Performance Amid Challenges
In fiscal 2025, Deere & Company achieved $5 billion in net income. This performance came despite a 30% downturn in the North American agricultural sector. The company recorded impressive margins in equipment operations at 12.6%, outperforming results from 2016 by 450 basis points.
At the close of fiscal 2025, Deere maintained a robust cash flow of over $5 billion from equipment operations. Additionally, it returned $2.8 billion to shareholders through dividends and buybacks.
Future Projections and Stock Valuation
Looking ahead, analysts project that Deere’s stock could climb to $655 by October 2028, translating to a potential total return of 27% from its recent trading price of $514. This projection assumes the stock will benefit from structural improvements and the ongoing technology transformation within the industry.
Revenue Growth Expectations
- 7.4% Annual Growth: Revenue growth will be driven by both recovery and increased technology adoption.
- Large Agriculture: Management anticipates a stabilization, with the sector expected to decline by 15-20% in 2026.
- Small Agriculture & Turf: Anticipated growth of 10% in 2026, supported by strong margins and inventory recovery.
- Construction & Forestry: Expected growth of 10%, bolstered by increased investment in infrastructure.
Technology Adoption Advancements
Deere is leading the charge in technological innovations with products like See & Spray technology. This service has gained traction, showcasing over 90% adoption rates on new combines, and substantial increases in usage from returning customers.
Autonomous tillage kits are set to enter commercial production by spring 2026, marking another significant milestone for Deere.
Potential Scenarios and Stock Performance
Deere’s stock may perform differently based on revenue growth trajectories through October 2028.
| Scenario | Revenue Growth | Total Return | Annual Growth Rate |
|---|---|---|---|
| Low Case | 7.2% | 25% | 4.8% |
| Mid Case | 8% | 54.9% | 9.6% |
| High Case | 8.8% | 86.6% | 14% |
Conclusion
Deere & Company’s transition into a technology-driven platform signifies a crucial turning point. Understanding this shift is essential for investors looking to gauge the company’s potential for growth beyond 8% by 2026. With evolving market conditions and technology adoption, Deere appears positioned for sustained growth.
