Deere & Co. Stock Declines Amid Tariff and Downgrade Concerns

Deere & Co. faces pressure as shares drop 3.9% following an analyst downgrade and new tariffs. With weak revenue and profit forecasts, investors should be cautious.

Date: 04-03-2025

AI Rating: 4

Market Reaction: Shares of Deere & Co. (NYSE: DE) fell by 3.9%, indicating a negative investor sentiment driven by an analyst downgrade. This suggests that investors are wary of the agricultural machinery stock's current valuation and prospects in a challenging market environment.

Analyst Downgrade: R.W. Baird downgraded Deere's rating from outperform to neutral, reflecting a cautious stance on the company's near-term performance. The 8% upside to a projected price of $501 may not be convincing enough for investors, especially given the current market conditions.

Impact of Tariffs: President Trump's announcement of tariffs on external agricultural products adds uncertainty to the already struggling agricultural sector, and retaliatory actions from China could further undermine sales. This is especially concerning as 34% of Deere's sales and revenue come from outside the U.S. and Canada.

Sales and Net Income Declines: Recently, Deere reported a significant 30% drop in year-over-year sales and a staggering 50% decrease in net income for the first quarter. These figures highlight the difficulties the company is facing amidst declining commodity prices and geopolitical tensions. The expectation of $5 billion to $5.5 billion in net income for 2025 is concerning, as it represents a loss of nearly 22% compared to 2024.

Investor Sentiment: The combination of analyst downgrades, significant revenue and income decreases, pressures from tariffs, and geopolitical tensions points to a negative outlook for Deere & Co. and raises concerns about meeting future earnings guidance.

Stocks: DE