Episode Details

Deere & Company Q1 2026 earnings breakdown - conversational walkthrough with a price-aware verdict and Wall Street consensus comparison. THE CALL: HOLD (3/5 conviction, MODERATE) - CURRENT @ $531.35 - same - BUY below $450.00 with $400.00 stop - AVOID above $620.00 TRIGGER: Watch for two consecutive quarters of rising equipment orders and a guidance raise. Either would confirm the cycle has turned and justify upgrading to a Buy. WINDOW: 12-18 months. TRACKER: charged-alpha.com/calls/DE WALL STREET CONSENSUS - Ratings: 0 Strong Buy / 19 Buy / 21 Hold / 6 Sell / 0 Strong Sell - HOLD - Median 12-month price target: $613.76 (range $430 - $720) - Charged Alpha vs consensus: Charged Alpha is in line with the Street's Hold consensus. THESIS Deere is the best-run company in agricultural equipment, but it is two years into a downcycle with revenue still falling, and the stock trades near 30x trough earnings. Quality is not in question; the price and the timing are. Bull lever: If farm commodity prices firm and dealer inventories finish destocking, FY27 earnings could rebound toward $22-23 per share and the stock re-rates off mid-cycle numbers toward $650. Key risk: A prolonged downcycle plus tariff-driven cost inflation could push FY27 estimates lower instead of higher, and a 30x multiple on falling earnings leaves no margin of safety. QUALITY CHECK - Management quality grade: A- (John May has steered Deere through the precision-ag transition and is now managing the downcycle with textbook discipline, cutting production early and protecting price and margin.) - Earnings quality grade: B+ (The beat was clean and cash-backed, with no unusual adjustments, but it leaned heavily on cost cuts rather than demand, and headline leverage is muddied by the captive finance arm.) CHAPTERS 0:00 Hook 0:21 The Print 1:12 The Trend 2:03 The Segments 2:47 The FCF Bridge 3:31 Guidance & The Narrative Diff 4:28 Peer Dot-Plot 5:07 Management & Earnings Quality 6:30 S8_Call KEY METRICS - Q2 FY2026 - Revenue: $11,778M (-5.96% YoY, +1.97% vs est) - EPS GAAP: $6.55 (vs $5.70 est, +14.9% beat; -1.4% YoY) - Gross margin: ~35% - Operating margin: ~21% - FCF (equipment ops): ~$1.5B, up YoY - Revenue: 7th straight quarter of YoY declines - P/E TTM: ~30x SEGMENT HIGHLIGHTS - Production & Precision Ag (largest): sales down ~12% YoY - Small Ag & Turf: down ~3%, holding up better - Construction & Forestry: down ~8% on weak roadbuilding - Financial Services: up ~6%, the lone grower GUIDANCE - FY26 net income guide reaffirmed, not raised (~$4.75-5.25B) - Tariff costs and cautious farmer sentiment weigh on H2 DATA SOURCES - FMP (financialmodelingprep.com) - Deere & Company Q2 FY2026 Earnings Release (2026-05-21) DISCLAIMER This is for informational and entertainment purposes only. Not financial advice. Charged Alpha does not have a position in DE. Do your own research before any investment decision. #DE #JohnDeere #Deere #agriculture #farmequipment #industrials #earnings #investing #ChargedAlpha