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DE | Earnings Review — FQ3 FY2026

Verdict: INFLECTING off the trough, not re-accelerating. FQ3 is the first positive EPS print in eight quarters and the third straight quarter of sales growth, but the rate cooled from FQ1's +13% to ~5%, Production & Precision Ag is still shrinking, and the new FY26 NI guide is still a down year versus FY25.

Print (modest double beat): Total net sales & revenues $12,608 million (+4.9% YoY vs $12,018 million). Equipment-ops net sales $10,999 million vs FMP $10,815M (+$184M / +1.7%). Diluted EPS $5.10 vs FMP $4.69 (+$0.41 / +8.7%) and +7.4% YoY vs $4.75. Net income $1,379 million (+7.0% YoY). Mix, not a large-ag recovery: P&PA $3,998 million (−6.4%); SAT $3,383 million (+11.8%); C&F $3,618 million (+18.3%). SAT now earns more operating profit ($622 million) than P&PA ($527 million).

Quality of earnings: Incremental IEPA tariff refunds $110M in Q3 (FY26 YTD $382M; none assumed in Q4). At ~25% tax that is ~$0.31 of the +$0.41 EPS beat. Some Q4 demand was pulled into Q3. Strip the refund and EPS is still a few cents through $4.69 — the operating beat is real and small.

Guidance: FY26 NI raised to $4.75B–$5.00B (floor +$250M; ceiling held). Equipment-ops OCF $5.0B–$5.5B. P&PA sales parked at −10%. SAT +15% / C&F +20% held. New NI mid $4.875B / implied EPS ~$18.01 is in line to 60 bps light of FMP $18.12. Implied FQ4 EPS ~$3.94 vs Street $4.14. FY27 net tariffs step up ~$280M (refunds do not repeat). No FY27 P&L guide.

Tone: More confident on the year (floor raise, “very confident… finish strong”), downgraded on FQ4 cadence (P&PA and C&F sales “similar to” Q3; no refunds; seasonal R&D/SA&G). 2026 = ag trough; 2027 recovery measured, not sharp. CEO John May was not on the call.

Contradictions (6, three high): tariff price/cost coverage reversed over three prints; produce-to-retail flipped to underproduction; same-call P&PA “in line” vs −10% sales cut; FY27 tariffs labeled both tailwind and headwind.

Catalysts into 2026-11-25: closed MY2027 EOP (sprayers/planters); FQ4 as the first zero-refund print; any directional FY27 P&PA language. FMP FY27 EPS $22.22 (+23%) is a recovery the open mid-single-digit EOP and P&PA −10% have not earned.

P&PA is the historical earnings engine and is still shrinking. SAT and C&F now do the growth work; together they are 55.5% of FQ3'26 total revenue vs 45.2% for P&PA two years earlier. That mix shift is the print.

Segment drivers

| Driver | FQ4'24 | FQ1'25 | FQ2'25 | FQ3'25 | FQ4'25 | FQ1'26 | FQ2'26 | FQ3'26 | |---|---:|---:|---:|---:|---:|---:|---:|---:| | P&PA net sales ($M) | 4,305 | 3,067 | 5,230 | 4,273 | 4,740 | 3,163 | 4,503 | 3,998 | | YoY % | −38.2 | −36.8 | −20.5 | −16.2 | +10.1 | +3.1 | −13.9 | −6.4 | | P&PA op. profit ($M) | 657 | 338 | 1,148 | 580 | 604 | 139 | 706 | 527 | | P&PA op. margin | 15.3% | 11.0% | 22.0% | 13.6% | 12.7% | 4.4% | 15.7% | 13.2% | | margin YoY (bps) | −1,110 | −1,053 | −312 | −922 | −252 | −663 | −627 | −39 | | SAT net sales ($M) | 2,306 | 1,748 | 2,994 | 3,025 | 2,457 | 2,168 | 3,485 | 3,383 | | YoY % | −25.5 | −27.9 | −6.0 | −0.9 | +6.5 | +24.0 | +16.4 | +11.8 | | SAT op. profit ($M) | 234 | 124 | 574 | 485 | 25 | 196 | 719 | 622 | | SAT op. margin | 10.1% | 7.1% | 19.2% | 16.0% | 1.0% | 9.0% | 20.6% | 18.4% | | margin YoY (bps) | −420 | −635 | +124 | −21 | −913 | +195 | +146 | +235 | | C&F net sales ($M) | 2,664 | 1,994 | 2,947 | 3,059 | 3,382 | 2,670 | 3,790 | 3,618 | | YoY % | −28.8 | −37.9 | −23.3 | −5.4 | +27.0 | +33.9 | +28.6 | +18.3 | | C&F op. profit ($M) | 328 | 65 | 379 | 237 | 348 | 137 | 561 | 436 | | C&F op. margin | 12.3% | 3.3% | 12.9% | 7.7% | 10.3% | 5.1% | 14.8% | 12.1% | | margin YoY (bps) | −148 | −1,436 | −452 | −610 | −202 | +187 | +194 | +430 | | FS revenue ($M) | 1,522 | 1,470 | 1,385 | 1,418 | 1,548 | 1,384 | 1,366 | 1,371 | | FS NI ($M) | 173 | 230 | 161 | 205 | 293 | 244 | 190 | 219 |

Driver read. Three businesses, three trajectories.

1. P&PA is still the drag; the decline is decelerating. Same-quarter stack −25.1% → −16.2% → −6.4%. Op margin 13.2% is only −39 bp YoY after four quarters of −250 to −1,100 bp compression — the first near-stable P&PA margin of the trough. It is not a recovery: US/CA large ag is still guided −15% to −20%, and FY26 P&PA sales are now −10%.
2. SAT is the cleanest earnings beat. Sales +11.8%, op margin 18.4% (+235 bp). Growth is decelerating off FQ1's +24% — a restock, not a blow-off. Part of the 18.4% is IEPA refund + Section 232; do not annualize into a zero-refund FQ4.
3. C&F is still the volume engine; the rate is cooling. +18.3% sales, op profit +84%, margin 12.1% (+430 bp). Same-quarter stack −5.4% → +27.0% / +33.9% / +28.6% → +18.3%. Order book 4–5 months (typical 2–3); backlogs “well into fiscal 27.” FQ3 C&F price +8 pts includes a ~5 pt easy comp from FQ3'25 incentives; FY price is only +3 pts.

Consolidated P&L

| Metric | FQ4'24 | FQ1'25 | FQ2'25 | FQ3'25 | FQ4'25 | FQ1'26 | FQ2'26 | FQ3'26 | |---|---:|---:|---:|---:|---:|---:|---:|---:| | Total net sales & rev ($M) | 11,143 | 8,508 | 12,763 | 12,018 | 12,394 | 9,611 | 13,369 | 12,608 | | Revenue YoY % | −27.7 | −30.2 | −16.2 | −8.6 | +11.2 | +13.0 | +4.7 | +4.9 | | Equipment net sales ($M) | 9,275 | 6,809 | 11,171 | 10,357 | 10,579 | 8,001 | 11,778 | 10,999 | | Equipment GM % (calc.) | 29.2 | 26.0 | 31.9 | 26.9 | 24.9 | 21.5 | 29.8 | 27.8 | | GM YoY (bps) | −254 | −531 | −83 | −417 | −425 | −451 | −207 | +91 | | Eq. op. margin (calc.) | 13.1% | 7.7% | 18.8% | 12.6% | 9.2% | 5.9% | 16.9% | 14.4% | | Eq. OM YoY (bps) | −712 | −1,073 | −242 | −592 | −391 | −184 | −195 | +184 | | Total segment OP ($M) | 1,450 | 793 | 2,308 | 1,568 | 1,351 | 773 | 2,237 | 1,856 | | Diluted EPS ($) | 4.55 | 3.19 | 6.64 | 4.75 | 3.93 | 2.42 | 6.55 | 5.10 | | EPS YoY % | −44.9 | −48.8 | −22.2 | −24.5 | −13.6 | −24.1 | −1.4 | +7.4 | | NI to Deere ($M) | 1,245 | 869 | 1,804 | 1,289 | 1,065 | 656 | 1,773 | 1,379 |

YTD FY26 (FQ1–FQ3) total revenue $35.588B vs $33.289B (+6.9%); YTD NI $3.808B vs $3.962B (−3.9%). Earnings have not yet caught the sales inflection on a year-to-date basis.

Absolute sales — 12 quarters ($B)

Revenue YoY — 12 quarters

Annual arc (FY2021–FY2025)

| Metric | FY2021 | FY2022 | FY2023 | FY2024 | FY2025 | |---|---:|---:|---:|---:|---:| | Total net sales & rev ($M) | 44,024 | 52,577 | 61,251 | 51,716 | 45,684 | | Revenue YoY % | — | +19.4 | +16.5 | −15.6 | −11.7 | | P&PA ($M) | 16,509 | 22,002 | 26,790 | 20,834 | 17,311 | | SAT ($M) | 11,860 | 13,381 | 13,980 | 10,969 | 10,224 | | C&F ($M) | 11,368 | 12,534 | 14,795 | 12,956 | 11,382 | | Diluted EPS ($) | 18.99 | 23.28 | 34.63 | 25.62 | 18.50 | | EPS YoY % | — | +22.6 | +48.8 | −26.0 | −27.8 | | NI to Deere ($M) | 5,963 | 7,131 | 10,166 | 7,100 | 5,027 |

FY21–FY23 was the up-cycle; FY24–FY25 the down-cycle. FY26 NI guide $4.75–$5.0B is still ≤ FY25 $5,027 million. The quarterly inflection has not yet shown up in the annual run-rate.

FQ3 FY2026 was a modest double beat vs the pre-print FMP bar, not a blowout. Do not reuse the FQ2 review's “+15.7% revenue beat” — that compared total net sales & revenues to an equipment-like street number. Apples-to-apples, FQ3 equipment surprise is +1.7%.

Pattern: consistent beater, compressing iron surprise. L12Q EPS 12/12. L12Q equipment 10 beat / 1 in-line / 1 miss = 83%. L4Q 8/8. Equipment surprise stepped +7.6% → +5.4% → +2.0% → +1.7%.

Heatmap — last 8 quarters

This quarter vs consensus

| Metric | Consensus (FMP) | Actual (Daloopa) | Variance | Result | |---|---:|---:|---:|---| | Equip. ops net sales | $10,815M | $10,999M | +$184M / +1.7% | BEAT | | Diluted EPS | $4.69 | $5.10 | +$0.41 / +8.7% | BEAT | | Total net sales & revenues | $10,815M (wrong series) | $12,608M | +16.6% mix error | Do not use | | P&PA net sales | ~$3.9B (stale May-21) | $3,998M | directional | In-trough | | SAT net sales | ~$2.9B (stale) | $3,383M | directional beat | Beat vs stale bar | | C&F net sales | ~$3.5B (stale) | $3,618M | directional beat | The mix carry |

Street cut EPS $0.44 into the print (May-21 $5.13 → $4.69). Actual $5.10 beats the cut bar and is $0.03 short of the May-21 number.

Mgmt variance story: factories ahead of plan + price (P&PA +2.5 pts, SAT ~+1.5, C&F +8 pts with a −5% easy comp) + C&F/SAT mix. $110M IEPA refunds “slightly above” plan. Seibert to Oppenheimer: “we pulled ahead some demand to kind of manage some risk here in Q4.” The NI raise of +$125M at the mid is roughly the size of the FQ3 NI beat versus a $4.69 bar — they banked the quarter rather than adding 2H optimism.

| Window | Equipment vs FMP | Diluted EPS vs FMP | Pattern | |---|---|---|---| | L12Q | 10 / 1 I / 1 M = 83% | 12/12 = 100% | Consistent beater | | L4Q | 4/4 = 100% | 4/4 = 100% | Beater; shrinking surprise | | L4Q surprise path | +7.6 → +5.4 → +2.0 → +1.7 | +$0.09 → +$0.40 → +$0.85 → +$0.41 | Iron gap closing |

DE does not guide quarterly P&L and does not guide FY2027. The only formal dollar guide is FY26 NI, plus OCF, ETR, capex, FS NI, and segment sales/margin ranges.

FY2026 company outlook (raised 20 Aug 2026)

| Line item | Prior (FQ2, 21 May) | New (FQ3, 20 Aug) | Change at mid | |---|---|---|---| | NI attributable to Deere | $4.5B–$5.0B | $4.75B–$5.00B | +$125M (floor +$250M; ceiling held) | | Equip. ops OCF | $4.5B–$5.5B | $5.0B–$5.5B | +$250M at mid | | Capex | $1.4B | $1.3B | −$100M | | ETR | 24%–26% | 24%–26% | Unchanged | | Financial Services NI | $860M | $870M | +$10M | | Direct tariffs (ex-refunds) | ~$1.2B gross / ~$900M net | ~$1.1B gross; refunds YTD $382M; $0 in FQ4 | Net ~$718M vs ~$900M |

Implied diluted EPS from the NI range at 270.7 million shares: $17.55–$18.47, mid $18.01. New NI mid is −3.0% YoY vs FY25 $5,027 million. 9M NI already printed is $3.808B, leaving $0.94–$1.19B for FQ4 vs FQ4 FY25 $1,065 million.

Segment outlook

| Segment | Prior sales | New sales | Prior OM | New OM | |---|---|---|---|---| | P&PA | −10% to −5% | −10% approx. | 11–13% | 11%–12% | | SAT | +15% | +15% held | 13.5–15.0% | 14.5%–15.5% | | C&F | +20% | +20% held | 10–12% | 10.5%–11.5% |

Implied FY26 equipment-ops sales from those rates: ~$41.0B (+5.3%) vs FY25 $38,917 million, ~$0.5B / −1.2% below FMP $41.48B — entirely from parking P&PA at −10%.

Industry outlook (the cuts and the raise)

| Industry | Prior (FQ2) | New (FQ3) | Signal | |---|---|---|---| | US/CA Large Ag | −20% to −15% | −20% to −15% | Held — trough call intact | | US/CA Small Ag & Turf | Flat to +5% | Flat to +5% | Held | | Europe | Flat to +5% | Flat | Cut — arable profitability | | South America | −15% approx. | −20% to −15% | Cut — fertilizer + rates | | US/CA construction | +5% approx. | +5% to +10% | Raised — infra / data centers | | Global forestry | −5% | −10% | Cut — housing / log prices | | Global roadbuilding | +10% | +10% | Held |

Do not recycle the FQ2 review.json “C&F industry ~+20%” row. That was Deere C&F sales, not industry. FQ3 raised earthmoving industry to +5–10% while holding Deere C&F sales at +20%.

Waterfall — FY26 NI mid

FQ4 residual vs Street

| Metric | New guide residual | FMP FQ4 | vs Street | |---|---:|---:|---:| | NI ($M) | 942–1,192 (mid 1,067) | ~$1,120 ($4.14 × 270.7M sh) | −$53M / −4.7% at mid | | Diluted EPS | $3.48–$4.40 (mid $3.94) | $4.14 | −$0.20 / −4.8% | | Equip. ops sales | ~$10.2B (FY segment residual) | $10.53B | −3.0% | | IEPA refunds | $0 | n/a | Removed | | P&PA / SAT opex | Seasonal high R&D + SA&G | n/a | Explicit margin headwind |

Norwood's FQ4 bridge: P&PA and C&F net sales similar to FQ3; no Q4 refund; P&PA/SAT seasonal opex high. That walks back the FQ2 comment that Q4 revenue would be higher than Q3. Street's $4.14 sits at the high end of the residual NI range.

FY2027 — no company guide (Street only)

FMP: FY27 EPS $22.22 (17 analysts) / sales $44.84B = +22.6% / +8.1%. Management will only say: 2026 = trough; 2027 measured; EOP mid-single-digit; C&F backlogs into FY27; net tariffs a ~$280M headwind. A Street +23% EPS year on +8% revenue embeds a sharp margin rebound that mgmt has not endorsed.

One-line verdict: Revenue YoY has plateaued at ~+5% after a FQ4'25 / FQ1'26 sign-flip; EPS inflected to +7.4% YoY this quarter — the first positive print in eight quarters — on C&F/SAT mix offsetting still-negative P&PA, with $110M of Q3 tariff refunds as a quality caveat.

| Metric | FQ4'24 | FQ1'25 | FQ2'25 | FQ3'25 | FQ4'25 | FQ1'26 | FQ2'26 | FQ3'26 | |---|---:|---:|---:|---:|---:|---:|---:|---:| | Revenue YoY % | −27.7 | −30.2 | −16.2 | −8.6 | +11.2 | +13.0 | +4.7 | +4.9 | | Rev Accel (bps) | −1,093 | −248 | +1,395 | +760 | +1,985 | +174 | −822 | +16 | | EPS YoY % | −44.9 | −48.8 | −22.2 | −24.5 | −13.6 | −24.1 | −1.4 | +7.4 | | EPS Accel (bps) | −658 | −388 | +2,664 | −233 | +1,086 | −1,051 | +2,278 | +872 |

Accel = change in the YoY rate vs the prior quarter (second derivative — never sequential revenue).

| Quarter | Signal | What happened | |---|---|---| | FQ1 FY25 | Trough | Worst YoY of the window: revenue −30.2% to $8,508 million; EPS −48.8% to $3.19. All three equipment segments deep negative. | | FQ2 FY25 | Decline slows | Revenue Accel +1,395 bps; EPS Accel +2,664 bps. Still negative YoY — second-derivative turn, not a sign-flip. | | FQ4 FY25 | Revenue sign-flip | Revenue +11.2% ([+1,985 bps] Accel). First positive consolidated YoY. C&F snapped to +27.0%. EPS still −13.6% — profits lag shipments. | | FQ1 FY26 | Peak revenue YoY | Revenue +13.0% on easy comps and C&F +33.9%. EPS backslid to −24.1%. Top-line peak, earnings still in the hole. | | FQ2 FY26 | Revenue decelerates; EPS almost crosses | Revenue +4.7% (−822 bps). EPS −1.4% to $6.55 vs $6.64 — one cent from a sign-flip. | | FQ3 FY26 | EPS inflection; revenue plateau | Revenue +4.9% (+16 bps — noise). EPS +7.4% (+872 bps) to $5.10. First positive EPS YoY in eight quarters. |

Trajectory-over-absolutes: the level of growth is modest; the direction of the rate has stopped rising. C&F and SAT growth rates are themselves decelerating, and P&PA is still negative. The consolidated plateau is C&F/SAT still growing fast enough to offset large-ag volume, not a synchronized recovery. Management's own FQ4 bridge argues for sales hold, margin/EPS rate at risk of a one-quarter fade.

Next scheduled print: 2026-11-25 (FQ4 FY2026). The stock-moving debate is not whether C&F can grow — that is confirmed — it is whether open MY2027 EOPs close high-single-digit with attach rates intact, after management used a mid-single-digit print and a P&PA −10% cut to declare 2026 the trough of a recovery it also called measured.

| # | Catalyst | Timing | Consensus / watch | Implication | |---|---|---|---|---| | 1 | FQ4 print + first FY27 color | 2026-11-25 | FMP FQ4 EPS $4.14 vs residual NI mid ~$3.94. YTD NI $3.808B → FQ4 $0.94–$1.19B vs $1,065 million. | Highest-conviction near-term setup. A $3.90–$4.10 “in-guide” print screens as a miss vs $4.14. Watch FY27 language more than the FQ4 number. | | 2 | MY2027 NA EOP close | Sprayers end-Aug; planters end-Sep; combines opened Aug | Open book already mid-single-digit vs last year's completed program. Street fishing for high-single-digit by close. | The 2027 multiple lives here. If they fade to flat, FMP $22.22 breaks. Combines are the FQ4/FQ1 tell. | | 3 | P&PA still −10% / SA + Europe | FQ4 run-rate | US/CA large ag held −15% to −20%. SA cut to −15% to −20%. Europe now ~flat. | FQ4 “similar” to $3,998 million is ~−16% YoY vs $4,740 million. Hardest comp of the year. | | 4 | C&F / data-center / infra | Continuous | Sales +20% held; OM tightened 10.5–11.5%. Earthmoving raised +5–10%. Forestry cut to −10%. Order book 4–5 months. | FQ4 “similar sales” to $3,618 million plus no refunds is a margin step-down test vs 12.1%. Excavators are 2027–29, not FQ4. | | 5 | Tariffs: $1.1B / $382M refunds / FY27 headwind | FQ4 zero refunds | Net ~$718M FY26 vs “right around $1 billion” FY27. ~$280M pretax / ~$0.75/sh after tax. | Cleanest 2027 estimate risk. FQ4 is the first zero-refund earnings print of FY26. | | 6 | Precision attach / Farm Progress | 2026-09-01 to 09-03 then FQ4 | See & Spray ~1/3 of NA sprayers (nearly double); >40% of NA planters with Exact*. Ops Center >520M engaged acres. | Not an FQ4 sales catalyst; it is the 2027 mix argument. | | 7 | SAT dairy / turf / India | FQ4 seasonal down-leg | +15% held; OM raised 14.5–15.5%. Implied FQ4 ~$2.72B vs $2,457 million. | Quiet earnings engine ($622 million OP). Risk is treating 18.4% as a run-rate. | | 8 | Used / new channel inventory | Continuous | MY23/24 high-HP tractors down ~40% YoY; new-used spread “largely normalized.” Modest underproduction vs retail. | Necessary condition for the trough call, not sufficient. | | 9 | FTC right-to-repair | Offline reprogramming by 2026-12-31 | 10-year consent (2026-07-08); $99M class settlement already 2026 news. | Sentiment/legal overhang, not FQ4 P&L. Mild negative on aftermarket capture. |

Bull confirmation: closed EOP high-single-digit or better with attach rates holding; FQ4 EPS inside residual NI; C&F book still 4–5 months; used inventories still tight.

Bear confirmation: EOP close flat to down; FQ4 misses $4.14 and demand (not the bridge they already gave) is blamed; SA/Europe cut again; another FQ4 refund after they said zero (quality-of-earnings negative).

Live analyst Q&A only (13 analysts, 15 pairs). CEO John C. May was not on the roster. Operator limited analysts to one question.

Street did not debate the quarter. It debated whether FY2026 is actually the ag-cycle bottom. Management was willing to give 2026 numbers (including a Q4 sales/margin bridge and an explicit FY27 tariff headwind). It was not willing to give 2027 volume, mix, or margin direction.

| # | Analyst | Topic | Grade | What they got / what they didn't | |---|---|---|---|---| | 1 | Jamie Cook, Truist | FY27 prod vs retail by region; EOP price | Deflected | Answered 2026 underproduction (~2 pts) and “cover inflation.” No 2027 regional plan, no price %. | | 2 | Tami Zakaria, JPM | $1.1B tariff: relief or refunds? | Well answered | Section 232 25%→15% Jun 1; 5 of 12 months; refunds scoped out of the $1.1B. | | 3 | Tami Zakaria, JPM | Deere-designed excavator | Well answered | 3 models; 3–4 year rollout; “early days.” | | 4 | Kristen Owen, Oppenheimer | Q3 tractor inventory / 3Q–4Q slip | Well answered | Pull-ahead admitted. Norwood's Q4 bridge (sales similar; $0 refunds; seasonal opex) is the most useful forward comment on the call. | | 5 | Tim Thein, RJ | FY27 mix from precision (old 2–3 pts) | Deflected | “Too early.” Would not even say mix is a tailwind. | | 6 | Jerry Revich, Wells | EOP regional; can MSD exit HSD? | Well answered | US > Canada; programs still open; take-rates volunteered. Would not extrapolate an open book. | | 7 | David Raso, Evercore | EOP cadence: grain vs tech, last 4–6 weeks | Deflected | “Would not read much into it… as expected.” | | 8 | Rob Wertheimer, Melius | 8R orders; Europe vs US crop-price response | Well answered | 8R “as expected”; no last-two-day step-up; Brazil 3-month book; Europe arable weak / dairy stable. | | 9 | Stephen Volkmann, Jefferies | C&F programs + dealer rental loading | Well answered | 4–5 months vs typical 2–3. Rental split not given. | | 10 | Steven Fisher, UBS | Net tariff 2026 vs 2027: sign? | Well answered | Headwind. $1.1B − $382M = ~$718M FY26 vs ~$1.0B FY27. | | 11a | Chad Dillard, Bernstein | C&F price: FY +3 pts vs Q3 +8 pts | Well answered | Easy comp: FQ3'25 C&F price about −5% on incentives. | | 11b | Chad Dillard, Bernstein | Dealer-rental size and economics | Deflected | 30–35% of earthmoving transactions start as rental; “wait and see” on 2027 fill. | | 12 | Angel Castillo, MS | EOP → 2027 margins up/down/neutral; FTC → 5-year LCS | Deflected | “Cover inflation”; right-to-repair “has not changed.” Zero signed margin arrow. | | 13 | Peter Kalo / Baird | Europe 2027; CAP 2028 pull-forward vs delay | Deflected | “Too early” to all three asks. | | 14 | Sabahat Khan, RBC | US vs Brazil farmer input-cost positioning | Well answered | Intended application not collapsing; Brazil fertilizer different from US. |

What they would answer: tariffs, Q4 sales “similar to Q3,” C&F price comps, order-book months, EOP level, tech take-rates, 8R “as expected.” When a number is in the current-year plan, they give it — including unhelpful ones. What they would not: any 2027 production, mix, EOP-exit, margin, Europe, or rental-P&L framework. That is the contradiction to carry — not a missed quarter, a missing 2027 model.

Six contradictions, three high-materiality. Deere is consistent on the things it will put on a slide (NI range, US/CA large-ag −15% to −20%, SAT +15%, C&F sales +20%). The breaks cluster where the trough thesis is most sensitive.

Checked, no contradiction: FY26 NI path is raises-only (floor up, ceiling never lifted past $5.0B). US/CA large ag −15% to −20% held four prints. SAT +15% held; C&F sales +20% held. “2026 is the bottom” repeated since FQ4 FY25; recovery still framed as measured, not a V.

Management did not name CNH, AGCO, Caterpillar, Komatsu, Kubota, or URI. The only external operating company named is Tenna (already owned). Inferred rows are moderate-confidence.

The industrial tape DE is seeing is CAT-like, not housing-like. C&F $3,618 million +18.3% YoY, order book 4–5 months, backlogs into FY27, US/CA earthmoving raised to +5% to +10%, road building ~+10%, demand named as infra + data-center site work + pipelines + rental. Forestry −10%.

Large-ag is still at trough; 2027 is being sold as measured. P&PA $3,998 million −6.4% YoY; US/CA large ag held −15% to −20%; South America cut to −15% to −20%; Europe ~flat. The bullish tells are setup (open EOP mid-single-digit, used MY23/24 high-HP −40%, $5.05 corn) — not 2H26 volume.

| Name | Relationship | DE datapoint | Implication | Confidence | |---|---|---|---|---| | CAT | C&F competitor | C&F +18.3% to $3,618M; earthmoving +5–10%; 4–5 month book; data-center / infra / pipeline | Better for CAT Construction Industries / rental loading. DE excavators (3 models) are 2027–29 share-shift risk, “early days.” | High (end-market) | | URI / AHT / HRI | Rental customers | 30–35% of earthmoving transactions start as rental and growing; producing below retail | Better. Utilization implied high; 2027 dealer-fleet restock is incremental OEM demand. | High (category named) | | Kubota | SAT / compact peer | SAT +11.8% to $3,383M; OM 18.4% (+235 bps); turf normalizing; compact +5% | Better. Kubota lives in compact/SAT/turf. DE's SAT beat is a high-confidence positive read. | High (end-market) | | CNH | Large-ag + construction peer | US/CA large ag −15% to −20%; SA −15% to −20%; EOP mid-singles; used HHP −40% | Same-cycle, slightly worse mix. CNH is more Brazil/Europe-weighted and lacks DE's SAT + C&F earnings cushion. | Moderate | | AGCO | Europe-heavy large-ag | Europe arable “pressured”; industry now ~flat; heat/drought | Worse relative to DE. Europe is AGCO's profit pool; DE split Europe into weak arable vs stable dairy/SAT. | Moderate | | Hitachi Construction | Excavator supplier-turned-competitor | First Deere-designed excavators; 3 models; 3–4 year rollout | Worse as DE localizes and weans off Hitachi over the model cycle. Share-shift risk, not yet a volume print. | Moderate | | VMC / MLM / GVA | Aggregates / road / infra | Road building ~+10% held; data-center site work | Better. Three-legged stool: road + infra + data-center dirt. | Moderate | | WY / LPX / WFG | Forestry / lumber | Global forestry −10%; subdued residential; softer log prices | Worse for forestry equipment and lumber/OSB realizations. | High (category named) | | CTVA / Bayer / FMC | Crop-chem | See & Spray ~1/3 of NA sprayers, >50% herbicide savings | Worse for herbicide volumes per acre. Structural demand destroyer even if acres hold. | Moderate | | MOS / CF / NTR | Fertilizer | Brazil fertilizer elevated; intended application “not collapsing”; shopping alternative sources | Volume resilient, price/mix pressured. Brazil is the stress geography. | Moderate | | Tenna vs TRMB / IOT | Job-site software | Tenna named; SmartGrade factory-installed +50% YTD | Better for DE C&F attach. Medium-term share risk to TRMB construction software / Samsara mixed-fleet. | High (named) | | Hyperscalers / midstream | Indirect C&F end-customers | Data-center construction + pipeline activity; backlogs into FY27 | Better for data-center civil/site-work (not power-gen) and midstream ROW contractors. | Moderate |

Tariff refunds are a 2026 sugar-high; net tariffs step up in 2027. Direct ~$1.1B minus $382M refunds ≈ $718M net this year; FY27 run-rate “right around $1 billion.” Section 232 25%→15% is a partial offset, not enough. Sector-wide: 2026 earnings sugar for import-exposed US industrials (DE, CAT, CMI, AGCO); 2027 compares get harder.

What management is repeating that the Street may still under-weight: 2026 is the ag-equipment bottom and the 2027 recovery will be measured, not sharp — while C&F/SAT already carry the P&L. The contradiction to fade is any model that needs a V-shaped 2027 large-ag snapback or treats $382 million of IEPA refunds as a run-rate.