New York, Feb 23, 2026, 16:04 ET — After-hours
- Deere dropped roughly 2.5% as Jefferies downgraded the stock to Underperform.
- The broker points out the stock’s rally has driven its valuation far past previous cycle highs.
- Tariff aftershocks linger, and investors now look ahead to the upcoming earnings report in May.
Deere & Co dropped 2.5% on Monday, giving up an early rally as Jefferies cut its rating on the farm machinery giant. Shares settled at $646.26, moving within a range from $644.44 up to $669.37 throughout the session.
Jefferies lowered its rating on Deere to Underperform from Hold, but bumped the price target up to $550 from $475. Analysts at the firm argued that Deere’s recent rally has already priced in much of the gains expected from the next cycle. They also flagged valuation, noting Deere is trading at about 35 times earnings — that’s the price-to-earnings ratio, indicating how much investors are paying for each $1 in profit. (Investing.com)
Investors were bracing for bad news even before the downgrade hit. Wall Street tumbled following President Donald Trump’s fresh tariff announcement, which rattled nerves about trade and economic momentum. The Dow slid roughly 1.6%, and the S&P 500 lost about 1.1%, according to a Reuters report. (Reuters)
Stephen Volkmann at Jefferies isn’t convinced the stock accounts for just how drawn-out the farm slump might be, despite Deere’s robust kickoff to 2026. “Retail sales continue to decline, and farmer economics remain weak,” Volkmann said, pointing to nine consecutive quarters of shrinking volumes. (Barron’s)
After beating first-quarter estimates, Deere offered a more level-headed outlook Thursday and sounded optimistic about demand beyond big ag. “We’re encouraged by the ongoing recovery in demand,” CEO John May said. He also noted that the current cycle is expected to bottom out in 2026.
Deere has flagged ongoing tariff risks to both costs and profit margins, reiterating concerns even after its latest earnings. According to Reuters, the company is bracing for a roughly $1.2 billion pre-tax tariff hit in fiscal 2026. (Reuters)
Machinery stocks lost ground as well. Shares of CNH Industrial slipped 2.4%, AGCO declined 1.6%, and Caterpillar ticked 0.2% lower.
The tougher challenge for Deere bulls? Timing. Should farm cash flows fail to bounce back soon, with crop prices still under pressure or large buys pushed off yet again, the stock’s premium valuation could quickly become the main narrative.
Eyes turn to Washington for signs of new tariffs, while the market looks for signals on spring demand heading into planting season. Deere’s next results are on the calendar for May 21, Zacks Investment Research says. (Zacks)
