Deere Stock Surges on Upbeat Earnings & Guidance: Agri ETFs to Play

Core Insights - Deere & Company reported Q1 fiscal 2026 earnings of $2.42 per share, exceeding the Zacks Consensus Estimate of $1.92, although this represents a 24% decline from the previous year [1] - Net sales from equipment operations reached $8 billion, marking a 17.5% increase year-over-year and surpassing the Zacks Consensus Estimate of $7.6 billion [1] - Total net sales, including financial services, amounted to $9.61 billion, up 13% from the prior year, driven by higher shipment volumes despite increased tariffs [2] Segment Performance - The Production & Precision Agriculture segment saw sales grow 3% year-over-year to $3.16 billion, aided by favorable foreign currency translation, while Small Agriculture & Turf sales surged 24% [3] - Construction & Forestry sales increased by 34% year-over-year to $2.67 billion [3] - The cost of sales rose 24.7% from the prior year to $6.28 billion, leading to a 2.9% decline in total gross profit to $1.72 billion [3] 2026 Guidance - Deere expects net income for fiscal 2026 to be between $4.5 billion and $5 billion, an increase from the previous estimate of $4.00-$4.75 billion [4] - Net sales for the Production & Precision Agriculture segment are projected to decrease by 5-10% year-over-year, while sales in Small Agriculture & Turf and Construction & Forestry are expected to rise about 15% each, up from a previous forecast of 10% [5] Market Reaction - Following the earnings report, Deere's shares rose approximately 11.6% on February 19, 2026 [2] - CEO John May expressed optimism regarding the recovery in demand within construction and small agriculture segments, despite anticipating a pre-tax tariff impact of around $1.2 billion for fiscal 2026 [6] ETFs Performance - Several ETFs with significant holdings in Deere stock also experienced gains on February 19, 2026, including: - iShares MSCI Agriculture Producers ETF (VEGI) - Up 3.5% [8] - Global X AgTech & Food Innovation ETF (KROP) - Up 2.8% [9] - First Trust Indxx Global Agriculture ETF (FTAG) - Up 1.1% [10]