Is DE a good stock to buy? We came across a bullish thesis on Deere & Company on Trevor Young’s Substack. In this article, we will summarize the bulls’ thesis on DE. Deere & Company’s share was trading at $594.52 as of April 20th. DE’s trailing and forward P/E were 33.53 and 33.44 respectively according to Yahoo Finance.
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Deere & Company engages in the manufacture and distribution of various equipment worldwide. DE entered 2026 at the bottom of a challenging cycle, following a 2025 net income decline of nearly 30% to $5.03 billion. While traditional machinery sales—referred to as “iron”—face cyclical headwinds, Deere’s transition to “intelligence” through software, autonomy, and precision agriculture technologies is beginning to decouple from the boom-bust pattern.
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Q1 2026 results highlight this shift, with net sales rising 13% year-over-year to $9.61 billion, driven by small agriculture and construction equipment, while net income declined to $656 million from $869 million in 1Q25 due to ongoing cyclical compression. Deere raised its full-year 2026 profit guidance to $4.5–$5.0 billion, signaling that inventory and high-interest-rate pressures may be easing, and the stock reflects a quality premium with a P/E of ~32.5x.
The company is pivoting into a “Smart Industrial” platform, introducing autonomy-ready 8R and 8RX tractors capable of managing full-field operations with minimal human oversight, and expanding See & Spray™ adoption to over 90% on new combines, improving yields by up to 20% while reducing input costs. Deere is also building recurring revenue streams through per-acre and subscription-based software models, providing resilience against commodity price swings.
Strategic challenges remain, including a $1.2 billion tariff headwind and a still-weak agriculture segment expected to decline 15–20% in 2026, but growth in construction and forestry equipment, supported by infrastructure spending, offers a valuable hedge. With a stable dividend of $1.62 per share (1.1% yield), a 37% payout ratio, and ~20% ROE, Deere presents a classic “trough” investment: short-term cyclical pain coupled with long-term technological leadership, positioning the stock as an attractive entry point into the evolving operating system of global food production.
Previously, we covered a bullish thesis on Deere & Company (DE) by Best Anchor Stocks in May 2025, which highlighted strong quarterly results, margin resilience near the cycle trough, and expansion of its ag tech stack into SaaS. DE’s stock price has appreciated by approximately 17.03% since our coverage. Trevor Young shares a similar view but emphasizes Deere’s pivot to “intelligence,” focusing on autonomy-ready tractors, See & Spray™, and subscription-based software driving recurring revenue.
Deere & Company is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 60 hedge fund portfolios held DE at the end of the fourth quarter which was 67 in the previous quarter. While we acknowledge the risk and potential of DE as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than DE and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
