Deere stock jumped about 4% to roughly US$647 after earnings, which tells you investors saw enough in this quarter to lean in rather than hold cash instead. That move comes after a solid run over the past three months, so expectations were already warm.

The headline is margin resilience from the iron maker. Equipment operations posted an operating margin of 14.4% on US$12.61b of net sales and revenues, with Construction and Forestry and Small Ag and Turf doing the heavy lifting while big agriculture stayed soft. The full year guidance lift on net income and cash flow is what really caught the market’s eye.

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Q3 2026 Earnings Summary

• Revenue, Q3 2026 vs. Q3 2025: US$12,608m vs. US$12,018m (up about 4.9%)
• Net Income, Q3 2026 vs. Q3 2025: US$1,379m vs. US$1,289m (up about 7.0%)
• Basic EPS, Q3 2026 vs. Q3 2025: US$5.11 vs. US$4.76 (up about 7.3%)
• Operating Margin, Equipment Operations Q3 2026: 14.4% on US$12.61b of net sales and revenues (indicates solid profitability in Deere’s core equipment business)

Prefer clean charts instead of another dense block of earnings commentary and raw figures? See Deere’s full financial picture, including a visual breakdown of its valuation and margins, in the company report for Deere.

Deere bull case leans on margins and tech proof points

Bulls argue Deere is becoming a higher quality, tech led, less cyclical equipment company, with Construction & Forestry and precision ag carrying earnings while big ag is weak. Q3 margins and guidance give that view real but partial support. Equipment operations held a 14.4% margin on US$12.61b of revenue, while Deere still expects equipment operating cash flow of US$5.0b to US$5.5b and higher full year net income of US$4.75b to US$5.00b. C&F sales rose 18% to US$3.618b with margin at 12.1%, and Small Ag & Turf margin reached 18.4%. Technology usage is scaling, with 1.2m connected machines and over 450,000 monthly active digital users. The miss in the bull script is Large Ag. Production & Precision Ag sales fell 6% to US$3.998b and full year sales are guided down about 10%, so the tech story is cushioning, not yet flipping, the ag cycle.

Deere bear case focuses on ag trough, tariffs and labor

Bears worry that a weak Large Ag cycle, tariff drag and labor costs will cap margins and leave the stock exposed if expectations stay too high. Q3 does not fully back that up, but it does not clear the deck either. The trough in Production & Precision Ag is real, with full year sales still expected to fall about 10% and margin guided to 11% to 12%. Tariffs remain heavy. Direct tariff expense for FY26 is now seen at about US$1.1b, with net exposure near US$750m after US$382m of refunds, and an expected run rate closer to US$1.0b next year as refunds fade. UAW talks are unresolved and management acknowledges the union’s proposal sits about US$500m richer than Deere’s. That keeps future labor margin risk alive even as today’s 14.4% equipment margin and raised guidance argue current execution is holding up.

Reveal where the surface looks calm but the models start to disagree, and see what the street is quietly building into its multi year revenue and EPS paths with the analyst estimates for Deere.

Stay Ahead With Deere Insights

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.