John Deere Stock Hits 52-Week High as CEO Calls 2026 "The Bottom" of the Farm Slump

Deere & Company reported Q1 fiscal 2026 earnings on Wednesday that beat Wall Street expectations, sending the stock up over 10% to a new 52-week high. But the headline for farmers isn't the stock price — it's what CEO John May said about where we are in the ag cycle: "2026 represents the bottom of the current cycle." Here's what the numbers show and what it means for your operation.

The Earnings: Better Than Expected

Deere reported Q1 fiscal 2026 net income of $656 million, or $2.42 per diluted share, on revenue of $9.61 billion. Both figures beat analyst expectations — Wall Street had estimated around $2.06 per share on roughly $7.7 billion in revenue. Equipment operations net sales came in at $8.0 billion, up 18% from the same quarter a year ago.

That said, net income itself was down from $869 million in Q1 fiscal 2025. The beat was relative to lowered expectations, not an absolute improvement. The decline in profitability despite higher revenue tells you something important about the cost pressures Deere — and by extension, the farmers buying their equipment — are facing right now.

Where the Growth Is (and Isn't)

Deere's three equipment segments told very different stories this quarter:

• Production & Precision Agriculture (large tractors, combines, sprayers): Sales grew just 3% to $3.16 billion, but operating profit dropped 59% to $139 million. Operating margin fell from 11.0% to 4.4%. This is the segment most relevant to row-crop farmers, and it's getting squeezed by tariffs, unfavorable sales mix, and higher warranty costs.
• Small Agriculture & Turf (compact tractors, mowers, utility equipment): Sales surged 24% to $2.17 billion, with operating profit up 58%. This segment is recovering.
• Construction & Forestry: Revenue jumped 34% to $2.67 billion, with operating profit more than doubling. This was the biggest growth driver in the quarter.

The takeaway: the parts of Deere's business that serve large-scale row crop farming are still under pressure. The earnings beat was driven primarily by construction and small ag/turf — not by a recovery in the large ag equipment market.

"The Bottom of the Current Cycle"

The most important line from the earnings call came from CEO John May: "These positive developments reinforce our belief that 2026 represents the bottom of the current cycle and provides us with a strong foundation for accelerated growth going forward."

May acknowledged that the global large agriculture industry "continues to experience challenges" but said the company is "encouraged by the ongoing recovery in demand within both the construction and small agriculture segments."

This is the second time Deere has made this call. Back in November 2025, when the company initially issued fiscal 2026 guidance, May said Deere believes 2026 "will mark the bottom of the large ag cycle." The Q1 results — and the raised guidance — are Deere doubling down on that view.

If Deere is right, it means the worst of the equipment downturn is happening now, and demand should start recovering in fiscal 2027 and beyond. That's a meaningful signal for farmers weighing major equipment purchases.

The Tariff Problem: $1.2 Billion

One major headwind Deere highlighted: tariffs are projected to cost the company approximately $1.2 billion in fiscal 2026. That's a significant drag on profitability, and it hit the Production & Precision Agriculture segment hardest — which is exactly the segment that serves corn and soybean farmers.

Deere said its pricing strategy is "price cost neutral inclusive of the $600 million of incremental tariffs" being absorbed this year. In plain terms: they're passing some of the tariff costs through to equipment prices. If you're shopping for a new combine or large tractor in 2026, tariff-driven price increases are part of the equation.

What the Stock Rally Means (and Doesn't Mean)

DE shares surged over 10% following the earnings report, hitting a new 52-week high around $654. The stock has rallied roughly 60% from its 52-week low near $404. Wall Street is clearly pricing in Deere's view that the cycle is bottoming and recovery is ahead.

But a rising stock price reflects investor expectations about future profits — it doesn't mean the farm economy has already turned. Deere's own guidance projects the North American large ag equipment market will decline another 15% to 20% in 2026. The stock is rallying because investors are looking past the current downturn, not because the downturn is over.

What This Means for Your Operation

Equipment Decisions

If Deere is correct that 2026 is the bottom, equipment availability and pricing could tighten as demand recovers in 2027. Farmers who have been holding off on equipment purchases may find that current-year deals — while still elevated by tariff costs — could look better in hindsight if prices rise further as demand returns. On the other hand, if the recovery is slower than Deere expects, there's no rush.

The Bigger Picture on Farm Economics

Deere's view that we're at a cycle bottom aligns with what many farmers are feeling: tight margins, lower commodity prices compared to the 2021–2023 boom, elevated input costs, and cautious spending. The company's own numbers confirm it — large ag equipment demand is still falling.

The optimistic read is that cycles do turn, and the signals Deere is seeing in small ag and construction suggest broader economic conditions are improving. The cautious read is that large ag is the last segment to recover, tariffs are adding costs, and farm net income is still under pressure.

Watch the Data, Not the Stock

DE's stock price is a useful barometer of investor sentiment about the ag equipment cycle, but it's not a direct indicator of farm profitability. Focus on the fundamentals that actually drive your operation: commodity prices, input costs, yield expectations, and your own break-even numbers. Those are what determine whether 2026 is a good year for your farm — regardless of where Deere's stock trades.

The Bottom Line

Deere's Q1 2026 earnings beat expectations, the company raised its full-year profit guidance, and the stock hit a new 52-week high. CEO John May is calling 2026 "the bottom of the current cycle" for the second time — a signal that Deere believes the worst of the ag equipment downturn is here and recovery lies ahead.

But the numbers also show that large ag — the segment that matters most to row-crop farmers — is still declining, tariffs are adding $1.2 billion in costs, and operating margins in Production & Precision Agriculture have been cut in half. The stock market is looking forward to recovery. Farmers are still living through the downturn.

As always, the best thing you can do is know your own numbers. The cycle will turn when it turns — your job is to make sure your operation can weather the bottom and be positioned to benefit when it does.

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Sources

• Deere & Company: Q1 2026 Earnings Press Release (Feb 19, 2026)
• Benzinga: John Deere CEO Calls 2026 The Bottom Of The Farm Slump
• Farm Progress: Deere Jumps as Tractor Maker Sees Upturn in Farm Economy
• Quad Cities Business: Deere & Co. Reports Better Than Expected Q1 Results
• Farm Policy News: Deere's 2026 Outlook Suggests No Farm Economy Uptick (Nov 2025)