Why Deere Stock Dropped Today
Key Points
Deere crushed on sales in its Q4 report, and beat nicely on earnings.
Guidance, however, was weaker than Wall Street anticipated, sparking a selloff.
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Agricultural machinery-maker Deere & Co. (NYSE: DE) stock fell 4% through 10:35 a.m. ET Wednesday, despite delivering surprisingly good earnings today.
For Q4 2025, analysts forecast Deere would earn $3.83 per share on sales of $9.8 billion. Deere beat the earnings forecast, reporting $3.93 -- and destroyed the sales forecast, reporting $12.9 billion, 32% ahead of estimates.
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Deere Q4 earnings
Earnings did decline year over year, down 14% despite an 11% gain in sales -- but the numbers weren't as bad as expected. For the full year, moreover, Deere earned only $18.50 per share, a 28% decline, on a 12% sales decline to $45.7 billion -- so relatively speaking, Q4 2025 was much better than 2025 as a whole.
And 2026? Turning to guidance, Deere gave a muted outlook, predicting "large ag" sales down as much as 20%, with other segments of its business mostly up low-to-mid single digits. At best, Deere thinks it might earn $4.75 billion in fiscal 2026, which, divided among the company's 270 million shares outstanding, would mean less than $17.60 per share in profit.
"This past year brought its share of challenges and uncertainty," explained CEO John May, and next year won't be great either. Still, the CEO predicts "we believe 2026 will mark the bottom of the large ag cycle," with things starting to look up thereafter.
Is Deere stock a sell?
Investors don't seem thrilled with the earnings beat, and are even less enthused about guidance. Wall Street analysts, after all, have been telling them to expect Deere to earn $19.32 per share in 2026 -- so what Deere basically guided to was a 9% 2026 earnings miss.
Factor in Deere's valuation, a pricey 27 times earnings, and it's no wonder investors are selling Deere stock today.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Deere & Company. The Motley Fool has a disclosure policy.
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