Deere Stock Gains After Baird Upgrade on North America Farm Equipment Outlook

Shares of Deere & Company (NYSE: DE) climbed on Monday after analysts at Baird upgraded the stock to Outperform from Neutral, citing a favorable outlook for agricultural equipment demand. The firm also significantly raised its price target on the company's shares.

Baird's Bullish Thesis

Baird lifted its price target on Deere to $800 from a previous $640. In a note to clients, analyst Mircea Dobre described Deere as having the "cleanest setup" due to its significant exposure to the North American row crop equipment market.

The analyst noted that Deere is often the first stock investors buy when anticipating a "fundamental inflection" in the agriculture sector. The upgrade reflects Baird's view that a cyclical recovery in North American demand is gaining momentum, positioning Deere for future growth.

Positive Demand Indicators

Ad

Baird's optimism is partly based on early indicators of a rebound. The firm pointed to commentary from Deere's early order programs, which suggest that orders for planters and sprayers are up by mid-single digits compared to the prior year's completed program.

This trend provides initial visibility into a recovery in both equipment production and the adoption of precision agriculture technology. According to Baird, this suggests the early order programs could finish even stronger. The firm projects Deere's earnings power could approach $25 per share in 2027 and reach the mid-$30s per share in 2028 as the recovery solidifies.

Market Reaction

Following the upgrade, Deere's shares rose 2.6% in Monday's trading session. The move comes as investors closely watch agricultural equipment manufacturers for signs of recovery amid shifting demand dynamics in the key North American market.