Deere Q3 Earnings Preview: Dealer Inventory, Farmer Sentiment In Focus

Deere & Co. (DE) stock has gained marginally over the past week ahead of the farm equipment maker’s earnings on Thursday.

Wall Street expects Deere to post fiscal third-quarter earnings of $4.55 per share on revenue of $10.33 billion. The company has topped estimates in three of the past four quarters.

In May, Deere stated that crop prices have generally stabilized, albeit at lower profitability levels due to tight stocks resulting from better-than-expected consumption and lower-than-expected crop production.

However, sales of large farm equipment, such as tractors and combines, have slowed as farmers navigate a still-elevated interest rate environment. However, the Federal Reserve could lower benchmark interest rates in September, which could bolster demand.

A Purdue University/CME group survey, revealed earlier in August, showed farmer sentiment remained weak in the U.S., but there were rising hopes that U.S. policy is headed in the right direction. U.S. President Donald Trump has recently urged China to step up its purchases of soybeans from the U.S., which could prove to be a boon for U.S. farmers.

Retail sentiment on Stocktwits about Deere was in the ‘extremely bullish’ territory, while retail chatter was ‘high.’

In July, Oppenheimer analysts had noted that the key debate around agriculture was whether the reversion trade had run its course.

Deere’s smaller rival AGCO had topped second-quarter profit estimates, and CEO Eric Hansotia projected an improvement in global demand in 2026. Investors would be keenly watching whether dealer inventories have remained elevated or not.

In May, the company had cut the lower end of its 2025 forecast and projected net income between $4.7 billion and $5.5 billion, compared with its prior earnings forecast between $5 billion and $5.5 billion. The projections included a pre-tax tariff impact in fiscal year 2025 of just over $500 million.

One user wrote that the stock has remained underappreciated for years.

However, Deere stock has gained 20.5% this year, outperforming the 10.2% gains of the S&P 500.

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