The attendees look at the John Dere 7R270 row crop tractor at the Dere & Company Booth during the World AG Expo at the International Agri-Center in California on February 11, 2025.
Patrick t. Fallen | AFP | Getty images
John dere Facing a crossroads as the company looks at the weak demand in the agriculture sector, while it has committed to invest millions in American manufacturing and further promised a bright road.
Agricultural machinery company Wags Last week, on its fiscal third quarter earnings call, it is looking very soft demand, which decreases in pure income and sales to post significant year-on-year.
The company is working to keep itself in a situation in large agricultural sector, with increasing challenges with rising costs, climate change effects, lack of labor and more.
Farmers are also dealing with low prices on crops like corn and grains and have returned their expenses as a result. In turn, the target audiences of the camp have pulled back at the desire to buy new agricultural equipment.
The dera has also been killed by tariff cost, estimating that it can take a hit of $ 600 million for the FY 2025 years. The company has already seen $ 300 million in tariff expenses.
Just after reporting its earnings, the company confirmed the CNBC that it announced 238 sorting in its Illinois and Iowa factories, adding thousands of people, which have been closed in the last one year. The company cited demand and low order volume as the main factors behind job reduction.
“As stated on our most recent earnings call, the struggling AG economy influences orders for John Deere equipment,” Dere told CNBC in a statement. “This is a challenging time for many farmers, producers and producers, and directly affects our business in the near period.”
The manufacturer employs more than 70,000 people globally.
Nevertheless, the dera has identified enough green shoots to point out a low-trolling future.
On its most recent earning calls, company officials emphasized an increase in demand in both Europe and South America after seeing weakness in North America. Despite the macroeconomic headwinds, the chairman of Deere’s worldwide agriculture and turf division said the company is confident in its future.
Corey Reid said on the call, “We think there are positive tail winds from what we see in business deals, and we think that whatever we see in tax policy, there are positive tail winds.”
And in June, the company issued a statement that “myth” exposed any claim that the camp may need to stop its American manufacturing due to a decline in demand. Instead, the company said that it was making a “bold move” to invest $ 20 billion in US manufacturing over the next 10 years.
It follows the same wire as announcements from companies, which is trying to ignore their “” “Built in the United States“Sow after the President Donald Trump Handed over the post. Before the election, Trump Threatened With 200% tariffs if it transfers production in factories in Mexico.
“In the next decade, we will continue to invest important in our original American market,” CEO John May said statement In June. “It outlines our dedication to innovation and development during the cost-practitioner in a global market.”
What is Wall Street Saying
Despite the struggles in the comprehensive agriculture sector, Wall Street analysts remain optimistic about the entire camp road.
OpenHaimer analyst Christon Owen wrote last week that it remains fast on the camp and it is expected that confidence has increased in 2026, Telling CNBC She believes that the company is taking “properly careful approach”.
Even Trite analyst Jamie Cook, who reduced his target after the camp earning last week and emphasized an uncertain approach to 2026, stated that he still believes that this year the company has a lower part of this year this year.
The company’s stock has seen an increase of about 30% in a period of one year.
Deer stock
Given the history and hits of the camp, DA Davidson analyst Michael Shleski told CNBC that he could not imagine the company very little from here.
“The way I say it is 2025, the lowest number of tractor sales in the history of modern agriculture could be the lowest number of tractors,” he said, with the possibility of a tendency to be adjacent to upwards.
Although optimism cannot translate directly for sales today, Shleski said that the “signs” of progress are enough to encourage them about the future of the company, including growth in Europe and South America.
“When some parts of the world are doing better, the parts that are not even parting are likely to follow,” said Shleski.
Not commenting directly on the latest round of the trim, Shleski said that he would not think the investors would be surprised to see the required cost-cutting measures at this point in the company’s trajectory.
Similarly, Morgan Stanley analysts wrote in a note that when the demand may decrease, they are standing behind a thesis that Dere’s earnings are down and the company remains a “long term of attractive opportunity”.
Analyst Angel Castilo told CNBC that large -scale dei and agricultural sector are cyclic, so when short -term uncertain, the long -term attitude for the company is likely to bounce back, given that there is a possibility of landing especially accurate agriculture.
“This is one of the unique areas where we think that even though there are more challenges next year, as we expect, earning negative risk is too much de-stiff or already occupied with expectation,” Castillo said.
Castillo stated that with its latest cost-cutting measures, Dere is protecting itself by overprofoousuce or by creating a supply chain issue.
“Today the reality is that we are still in an uncertain environment, and I think they are managed in a disciplined, rational manner, trying to make sure not to create a worse environment,” he said.
