Deere & Co. Earnings on Deck: (DE) Stock Building Momentum Into Print

Deere & Company's stock (NYSE: DE) has been building up a head of steam ahead of today's earnings, testing the $500 level during Tuesday's trading session, before closing the day up 2.22%. The agricultural machinery giant is on the cusp of releasing its fourth-quarter fiscal 2025 earnings report off the back of a 13% gain off October 13 lows.

The upcoming earnings report is expected to reveal earnings of $3.83 per share and revenue of $9.81 billion. These estimates represent a -15.82% decrease in earnings but a 5.78% increase in revenue year-over-year. This suggests that while Deere may be facing margin pressures, it is still managing to grow its top line. The market's reaction to the earnings report will depend on whether Deere can meet or exceed these expectations and provide a positive outlook for fiscal year 2026.

The specter of Deere's third-quarter results still looms large. Net income plummeted 26% to $1.29 billion, while net sales dipped 9% to $12.02 billion. Management attributed this downturn to an oversupply of used equipment, a situation that not only impacted the bottom line but also cast a shadow over the company's financial outlook. Analysts will be keen to see if Deere has managed to course-correct in Q4 and mitigate the impact of this oversupply.

Wall Street analysts are presenting a somewhat bifurcated view of Deere's prospects. Melius Research, in June, upgraded the stock to a Buy rating with an ambitious price target of $750. Their optimism stems from Deere's perceived strength in agricultural technology and the potential for recurring revenue streams linked to its precision agriculture offerings. However, other firms remain more cautious, citing concerns about cyclical downturns in the agricultural sector and the potential impact of global economic headwinds.

Deere's acquisition of Sentera, a remote imagery solutions provider, in May, signals a clear strategic direction. By integrating Sentera's drone-based imagery capabilities into its Operations Center™, Deere aims to provide farmers with enhanced data collection and analysis tools. This move aligns with the company's broader strategy of becoming a technology leader in the agricultural space, offering value-added services that extend beyond traditional machinery sales. The success of this integration and its impact on Deere's revenue streams will be a key focus.

Deere bulls are eyeing that break of $500 leading in to the print, with $470 having previously offered some support to the downside.