Evaluating Deere (DE) After Layoffs Tariff Headwinds And An Earnings Slowdown

Deere (DE) is heading into its upcoming earnings release with several pressure points in focus, including more than 2,000 layoffs at U.S. factories, recent EPS underperformance versus Wall Street, and a projected US$1.2b tariff hit.

See our latest analysis for Deere.

At a share price of US$514.40, Deere has seen a 7 day share price return of 5.39% and a 90 day share price return of 11.24%. The 5 year total shareholder return of 79.93% points to a stronger long run record, even as recent layoffs, tariff headwinds and softer farming conditions keep risk perceptions elevated.

If Deere’s recent moves have you thinking about where capital equipment demand could shift next, it may be worth sizing up opportunities across aerospace and defense stocks as a comparison point.

With Deere trading at US$514.40 and showing an 18.82% intrinsic discount alongside tariff and earnings pressure, you have to ask: is this pricing in too much bad news, or is the market already baking in future growth?

Most Popular Narrative: 2.4% Undervalued

With Deere last closing at US$514.40 and the most followed narrative pointing to fair value around US$526.91, the gap is modest but meaningful enough that the underlying assumptions matter.

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. This is positioning Deere to benefit from shifts toward high-efficiency, technology-enabled farming, which in turn is expected to lift both future revenue and net margins through higher-margin recurring software and data services.

Read the complete narrative.

Curious what kind of margin uplift and earnings profile sit behind that fair value, and how long it takes to get there? The most followed narrative builds in specific revenue, profitability and valuation multiple assumptions that go well beyond simple tariff headlines. The tension between softer near term demand and higher recurring software revenue is central to the story, and the numbers behind it are not what many would guess at first glance.

Result: Fair Value of $526.91 (UNDERVALUED)

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

However, higher tariffs that add an expected US$600m in annual costs and a projected 30% decline in North American large ag sales could easily derail that earnings recovery path.

Find out about the key risks to this Deere narrative.

Another View: Earnings Multiple Flags a Different Risk

Our DCF model points to fair value around US$633.67, which is a much larger gap than the 2.4% undervaluation implied by the most popular narrative. If the cash flow work is closer to the mark than the narrative inputs, is the market underestimating Deere or is the DCF too generous?

Look into how the SWS DCF model arrives at its fair value.

Build Your Own Deere Narrative

If parts of this story do not quite fit your view, or you would rather work from the raw assumptions and forecasts yourself, you can build a personalised Deere thesis in just a few minutes with 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?

If Deere has sharpened your thinking, do not stop here. Broaden your watchlist with focused stock ideas that speak directly to different parts of your portfolio.

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.

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