Deere & Company
Combined average of Moat (AI Resilience), Growth, and Valuation scores.
Moat Score
Dominant North American farm equipment franchise with the largest agricultural dealer network and a credible precision-ag software franchise — durable but cyclical. Large-ag demand is still soft, but Construction & Forestry books now run into FY27 and See & Spray / Operations Center adoption (>450k MAU) are extending the moat through the trough.
Deere's moat is the largest agricultural dealer network in the West paired with a growing precision-ag software franchise — durable on hardware, with optionality on software:
- Dealer Network Density: Deere's North American dealer footprint is unmatched — closer to farms, faster service, and parts availability that competitors (CNH, AGCO, Kubota) cannot match in core US/Canadian markets. Switching tractor brands means losing service proximity, which is a first-order farmer concern in season.
- Precision Ag Software Optionality: John Deere Operations Centre (>450K monthly active users; >520M engaged acres across ~1.2M connected machines) + See & Spray (5M acres as of Q2, up from 1M; Q3 factory take-rate ~1/3 of North American sprayers on order) + autonomous tractor development are real software franchises. Precision Essentials second-year renewal rates exceed 90% (Q2). The recurring layer compounds on the installed connected-machine base and is the structural moat extension through the hardware cycle.
- Cyclical Discipline: Through-cycle margin discipline and capital return have been industry-leading. Equipment-ops margin was 14.4% in Q3 FY26 (16.9% in Q2) against ~$1.1B FY26 direct tariff expense ($382M YTD refunds; FY27 net ~$1B) and Production & Precision Ag sales −6% — better trough resilience than CNH/AGCO, aided by Small Ag & Turf (+12%) and Construction & Forestry (+18%).
Moat Verdict
Deere is a high-quality industrial-AI franchise — autonomous farming and computer vision (See & Spray) compound the moat through the ag trough. Q3 confirms the software-extension thesis (>450K MAU, ~1/3 of NA sprayers on order with See & Spray) without a 10-moat status change. The near-term question is still cyclical (farmer balance sheet / large-ag orders) not technological; C&F strength into FY27 and precision adoption are carrying the print until PPA turns. AI is structurally additive.
76.7 resilient · 65.0 vulnerable · 80/20 = 74.3 · = 74
Open a moat to read its note.
Farmers and operators learn Deere controls and Operations Centre over years; some switching friction at the operator level.
Operations Centre + See & Spray + autonomous tractor software encode farm-level business logic that compounds with installed base.
N/A.
Agricultural-engineering and dealer-service technician bench is real and durable — Deere's training pipeline is decades old.
Tractor + implements + precision-ag software + financing is the most complete bundle in the industry; rivals address subsets. Breadth is real but unproven as a lock — no attach rate, retention figure or failed-unbundler on file — so it rates intact.
Operations Centre data across the connected fleet (>450K MAU; >520M engaged acres; ~1.2M connected machines) is genuinely unique — feeds See & Spray, autonomy, and agronomic insights.
EPA emissions, NHTSA on-road, and global homologation create real new-entrant barriers in agricultural equipment.
Dealer density is distribution scale rather than a two-sided network; it is now rated under scaleEconomics.
John Deere Financial finances a large share of equipment, dealer parts contracts and precision-ag subscriptions recur, and Operations Center has >450K monthly active users across >520M engaged acres — farm records a grower does not move.
Operations Centre is becoming the system of record for many farm operations — agronomy, equipment, financials in one platform.
Dealer density and the largest North American ag installed base support parts and service economics. (Moved here from networkEffects — dealer density is distribution scale, not a two-sided network.)
John Deere green carries a resale premium and farmer loyalty, but the brand is not strong enough to hold price through the ag trough without incentives.
Combined average of Moat (AI Resilience), Growth, and Valuation scores.
Moat Score
Dominant North American farm equipment franchise with the largest agricultural dealer network and a credible precision-ag software franchise — durable but cyclical. Large-ag demand is still soft, but Construction & Forestry books now run into FY27 and See & Spray / Operations Center adoption (>450k MAU) are extending the moat through the trough.
Growth Score
Q3 FY26: revenue $12.608B (+5%) and diluted EPS $5.10. Production & Precision Ag −6%, Small Ag & Turf +12%, Construction & Forestry +18%. FY26 net-income guide raised to $4.75–5.0B (floor +$250M vs the Q2 $4.5–5.0B hold); PPA sales tightened to ~−10%, SAT ~+15%, C&F ~+20%. Management reiterates that 2026 is the ag-cycle bottom; North America EOP planter+sprayer orders are already up mid-single digits vs last year's completed program, and C&F books are full into FY27. Q2 ($13.4B, EPS $6.55, PPA −14% / SAT +16% / C&F +29%) is in these figures. US & Canada large-ag industry still −15 to −20%; South America −15 to −20%; Europe now flat. Q4 prints 25 November 2026, 9:00 a.m. CT.
Valuation Score
At $647.47 (Friday 21 August 2026 close) Deere sits 0.4% below the $650 base after the Q3 beat — the Aug 10 card was ~$613 / authored 70. On FY26 trough EPS (~$18 at the $4.875B NI midpoint / ~270.7M diluted shares) the stock is ~36× — still a full precision-ag/software premium into a cycle bottom. Through-cycle valuation is closer to 20–24× normalised mid-cycle earnings; margin of safety is thin unless the FY27 recovery lands. The score is the live-price formula on an unchanged $470 / $650 / $820 ladder (t = (647.47 − 470) / 180 = 0.9859 → 65), not a thesis rewrite.
The Dealer-Plus-Software Moat
Deere's moat is the largest agricultural dealer network in the West paired with a growing precision-ag software franchise — durable on hardware, with optionality on software:
- Dealer Network Density: Deere's North American dealer footprint is unmatched — closer to farms, faster service, and parts availability that competitors (CNH, AGCO, Kubota) cannot match in core US/Canadian markets. Switching tractor brands means losing service proximity, which is a first-order farmer concern in season.
- Precision Ag Software Optionality: John Deere Operations Centre (>450K monthly active users; >520M engaged acres across ~1.2M connected machines) + See & Spray (5M acres as of Q2, up from 1M; Q3 factory take-rate ~1/3 of North American sprayers on order) + autonomous tractor development are real software franchises. Precision Essentials second-year renewal rates exceed 90% (Q2). The recurring layer compounds on the installed connected-machine base and is the structural moat extension through the hardware cycle.
- Cyclical Discipline: Through-cycle margin discipline and capital return have been industry-leading. Equipment-ops margin was 14.4% in Q3 FY26 (16.9% in Q2) against ~$1.1B FY26 direct tariff expense ($382M YTD refunds; FY27 net ~$1B) and Production & Precision Ag sales −6% — better trough resilience than CNH/AGCO, aided by Small Ag & Turf (+12%) and Construction & Forestry (+18%).
Moat Verdict
Deere is a high-quality industrial-AI franchise — autonomous farming and computer vision (See & Spray) compound the moat through the ag trough. Q3 confirms the software-extension thesis (>450K MAU, ~1/3 of NA sprayers on order with See & Spray) without a 10-moat status change. The near-term question is still cyclical (farmer balance sheet / large-ag orders) not technological; C&F strength into FY27 and precision adoption are carrying the print until PPA turns. AI is structurally additive.
76.7 resilient · 65.0 vulnerable · 80/20 = 74.3 · = 74
Open a moat to read its note.
Farmers and operators learn Deere controls and Operations Centre over years; some switching friction at the operator level.
Operations Centre + See & Spray + autonomous tractor software encode farm-level business logic that compounds with installed base.
N/A.
Agricultural-engineering and dealer-service technician bench is real and durable — Deere's training pipeline is decades old.
Tractor + implements + precision-ag software + financing is the most complete bundle in the industry; rivals address subsets. Breadth is real but unproven as a lock — no attach rate, retention figure or failed-unbundler on file — so it rates intact.
Operations Centre data across the connected fleet (>450K MAU; >520M engaged acres; ~1.2M connected machines) is genuinely unique — feeds See & Spray, autonomy, and agronomic insights.
EPA emissions, NHTSA on-road, and global homologation create real new-entrant barriers in agricultural equipment.
Dealer density is distribution scale rather than a two-sided network; it is now rated under scaleEconomics.
John Deere Financial finances a large share of equipment, dealer parts contracts and precision-ag subscriptions recur, and Operations Center has >450K monthly active users across >520M engaged acres — farm records a grower does not move.
Operations Centre is becoming the system of record for many farm operations — agronomy, equipment, financials in one platform.
Dealer density and the largest North American ag installed base support parts and service economics. (Moved here from networkEffects — dealer density is distribution scale, not a two-sided network.)
John Deere green carries a resale premium and farmer loyalty, but the brand is not strong enough to hold price through the ag trough without incentives.
Growth Analysis
Growth Drivers
Key Risk
If farmer income stays depressed through 2027 and the large-ag replacement cycle does not turn — while C&F growth cools from +20% toward mid-single digits — FY27 EPS stalls near $20 and the ~30×+ trough multiple compresses toward 18–20×.
Score Derivation
66.3 base + 2.7 trajectory − 5 risk = 64
Base 66 (5–8% CAGR mid-band, held) + 2.7 trajectory (C&F and precision ag accelerating; PPA left stable — EOP planter+sprayer + mid-single digits is an early-recovery signal, not a closed FY27 book) + 0 margin (tariff-pressured but through-cycle floor intact; SAT margin guide raised, Q4 refunds drop out) − 5 farmer-income/cycle residual risk = 64. NI floor $4.5–5.0B → $4.75–5.0B is a description update, not a CAGR lift. PPA stays stable: FY26 books are still trough (guide tightened to ~−10%); 2027 recovery is measured.
Price Scenarios (12–24 Months)
Valuation Multiples
| Forward P/E (FY26) | ~36× |
| Forward P/E (FY27) | ~28× |
| Price / Sales (NTM) | ~3.7× |
| PEG Ratio | ~3×+ |
| FCF Yield | ~3% |
Valuation already prices a clean cycle bottom and precision-ag optionality. $647.47 is the $650 base; upside from here is mostly earnings recovery into the base/bull corridor, not multiple expansion. Static score moved 70 → 65 because spot moved inside an unchanged $470 / $650 / $820 ladder.
Approximate figures as of August 2026.
Where We Are vs Targets
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Large-ag trough extends through 2027, C&F cools, and the multiple compresses from the mid-30s toward ~20× on still-depressed earnings.
- Grain prices and farmer income stay below long-term average through 2027; PPA replacement cycle slips into 2028
- Construction order book rolls over as data-centre/infra pull-forward fades
- See & Spray acre growth and Precision Essentials renewals slow as hardware install base stagnates
FY26 prints as the cycle bottom inside the $4.75–5.0B NI guide; FY27 EPS recovers toward ~$23–25, precision-ag ARR/renewals keep compounding, and the multiple settles near ~26×.
- PPA shipments stabilise then reaccelerate in FY27 as dealer inventories normalise; EOP planter+sprayer already + mid-single digits
- C&F sustains low-double-digit growth off the FY26 +20% guide, with books already full into FY27
- See & Spray factory take-rate and Ops Center engagement keep compounding; software mix supports the premium
Cyclical recovery plus autonomy/See & Spray commercial scale drives FY28 EPS to $30+ and a quality re-rate toward ~27×.
- Autonomous tractor and See & Spray commercial deployment accelerates in 2027–28
- Precision-ag recurring revenue becomes a visible, high-margin earnings pillar
- Capital return steps up as cycle EBITDA recovers and tariff headwinds ease