Deere & Company (DE) is positioned for long-term outperformance as rising global food demand and technological adoption fuel a structural recovery in agriculture equipment. With strong order backlogs and expanding margins, DE stands out among industrial peers.
- DE’s order backlog reached $22.8 billion in Q4 2025, up 14% YoY.
- Precision agriculture and software now contribute 15% of DE’s total revenue.
- DE’s adjusted EBITDA margin hit 21.3% in fiscal 2025, outpacing AGCO (17.6%) and CNHI (15.2%).
- Free cash flow totaled $3.8 billion in 2025, supporting potential dividend growth.
- DE stock up 19% YTD, outperforming the S&P 500 Industrials Index by 7 pp.
- AGCO (HOL) stock saw a 5% rise in trading volume, indicating sector-wide interest.
Deere & Company (DE) is gaining traction as a compelling long-term investment, driven by a confluence of macro and micro factors reshaping the global agricultural landscape. The company’s order backlog surged to $22.8 billion in Q4 2025, a 14% increase from the prior-year period, signaling sustained demand despite elevated interest rates. This level of visibility underscores the resilience of capital expenditure in farming, particularly in North America and key emerging markets like Brazil and India. The bull case rests on Deere’s leadership in precision agriculture and its integrated technology ecosystem, which includes the John Deere Operations Center and autonomous tractor pilots. These tools have driven a 22% increase in equipment utilization rates among customers, contributing to higher service and software revenue—now representing 15% of total revenue, up from 10% in 2022. This shift toward recurring revenue streams enhances earnings stability and margin expansion potential. Despite a 12% decline in unit sales of large tractors in 2024 due to inventory rebalancing, Deere’s adjusted EBITDA margin reached 21.3% in fiscal 2025, outpacing peers AGCO (HOL) and CNH Industrial (CNHI), which reported margins of 17.6% and 15.2%, respectively. The divergence highlights Deere’s operational efficiency and brand loyalty in a consolidating sector. Market reactions reflect growing confidence: DE’s stock has gained 19% year-to-date, outperforming the S&P 500 Industrials Index by 7 percentage points. Investors are also pricing in a potential 10% increase in dividend growth over the next three years, supported by strong free cash flow of $3.8 billion in 2025. Related equities such as AGCO (HOL) have seen a 5% uptick in trading volume, suggesting broader sector momentum.