On August 31, Baird upgraded Deere & Company (NYSE:DE) to Outperform from Neutral and raised its price target to $800 from $640, implying meaningful upside from the share price cited in the report. The upgrade is based on an expected improvement in North American agricultural fundamentals in 2027.
Baird expects mid-2027 corn futures to move above farmer breakeven levels, while soybean economics are also improving. Deteriorating crop conditions and tighter projected stocks-to-use ratios could support higher crop prices and improve per-acre farmer margins.
That matters for Deere because stronger farm profitability typically gives farmers more room to purchase large tractors, combines, planters, and other equipment. The timing is important because Deere's management has previously indicated that 2026 should represent the bottom of the current agricultural equipment cycle. At the same time, the company's Production & Precision Agriculture business remains under pressure, showing that the expected recovery has not fully reached its results yet.
Photo by Sebastian Gómez on Unsplash
The biggest bullish argument is that higher corn and soybean prices could signal the start of a new agricultural equipment replacement cycle. Farmers have delayed major machinery purchases during the downturn, so sustained improvement in crop economics could unlock pent-up demand.
#baird
Baird expects mid-2027 corn futures to move above farmer breakeven levels, while soybean economics are also improving. Deteriorating crop conditions and tighter projected stocks-to-use ratios could support higher crop prices and improve per-acre farmer margins.
That matters for Deere because stronger farm profitability typically gives farmers more room to purchase large tractors, combines, planters, and other equipment. The timing is important because Deere's management has previously indicated that 2026 should represent the bottom of the current agricultural equipment cycle. At the same time, the company's Production & Precision Agriculture business remains under pressure, showing that the expected recovery has not fully reached its results yet.
Photo by Sebastian Gómez on Unsplash
The biggest bullish argument is that higher corn and soybean prices could signal the start of a new agricultural equipment replacement cycle. Farmers have delayed major machinery purchases during the downturn, so sustained improvement in crop economics could unlock pent-up demand.
#baird
2 months ago
