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Deere's Big Bet: 2027 Farm Boom Incoming?
1 Sep
Summary
- Baird upgraded Deere to Outperform with an $800 price target.
- Farm economics expected to improve by mid-2027.
- Construction & Forestry segment shows strong growth with backlogs.
Baird recently upgraded Deere & Company (NYSE:DE) to Outperform, raising its price target to $800. This upgrade, effective September 1, 2026, anticipates a significant improvement in North American agricultural fundamentals by mid-2027. Expectations are for corn futures to surpass farmer breakeven levels by mid-2027, supported by improving soybean economics.
Deteriorating crop conditions and tighter stock-to-use ratios could further boost crop prices, enhancing per-acre farmer profitability. This typically translates to increased farmer spending on large machinery. Deere's management has previously indicated that 2026 represents the cycle's bottom, suggesting potential for substantial recovery.
Adding to the positive outlook, Deere's Construction & Forestry segment reported an 18% sales increase in its latest quarter, with customer backlogs extending into fiscal 2027. This diversification provides earnings support while the agricultural sector recovers. Baird projects Deere's earnings power could reach the mid-$30s per share by 2028.
However, concerns remain that Deere's stock, having risen approximately 39% in 2026, may have already priced in much of the anticipated agricultural recovery, with investors now paying for projected 2027 improvements.
