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Research Alert: Deere & Co. Q2 Fy 26: Construction Rebound Helps To Cushion Large Ag Decline

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CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:

DE's Q2 FY 26 (Oct.) results showed mixed performance with Production & Precision Ag sales declining 14% to $4.5B and operating profit falling 39% to $706M, compressing margins to 15.7% from 22% the prior year. EPS declined $0.09 to $6.55 as the core profit-driving segment remained under pressure from lower volumes and rising costs, with crop price recovery offset by elevated input costs keeping farmer profits pinched. Construction & Forestry delivered a strong turnaround with sales surging 29% to $3.8B and operating profit jumping 48% to $561M, reflecting improving construction activity. Small Ag & Turf demonstrated resilience with 16% sales growth to $3.5B and operating profit rising 25% to $719M. Management reiterated FY 26 net income guidance of $4.5B-$5.0B, noting market conditions aligned with expectations. We see overall earnings recovery remaining elusive until large Ag bounces back, though dealer inventory destocking should set conditions for stabilization in FY 27, in our view.

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