Key Points Fertilizer company FMC saw share prices plummet throughout 2025, but there's another agricultural stock that has delivered positive gains. Farm machinery maker Deere is up by around 11% year-to-date despite unfavorable macroeconomic conditions in the agricultural space. While FMC's future is highly uncertain, Deere may have a path to higher prices based on its pivot towards selling AI-enabled services to its customers. 10 stocks we like better than Deere & Company › It's an understate ...

Core Insights - Tariffs on steel and aluminum have significantly impacted U.S. manufacturing, particularly affecting equipment makers and farm machinery manufacturers due to increased input costs [1][2] - Deere & Company reported Q3 earnings of $3.93 per share on revenue of approximately $12.4 billion, exceeding sales expectations, but shares fell over 5% due to a projected $1.2 billion pre-tax tariff impact for fiscal 2026, nearly double the current year's effect [3][6] - The company's market value is around $125.6 billion, with a forward dividend payout of $6.48 per share and a yield of about 1.33%, supported by a dividend payout ratio of 32.95% [4] Financial Performance - Deere's fourth-quarter net income was approximately $1.065 billion, or $3.93 per share, compared to $1.245 billion, or $4.55 per share, a year earlier, slightly missing the $3.96 consensus [6] - Worldwide net sales and revenues increased by 11% to roughly $12.394 billion in the quarter, although full-year revenues decreased by 12% to about $45.684 billion due to cooling agricultural demand and margin pressures from tariffs [7] - The shares are trading around $468, reflecting a year-to-date increase of roughly 10% and a 1% rise over the past 52 weeks, with a valuation of approximately 24.18x forward earnings compared to a sector median of 20.33x [5][6]

Core Insights - Deere Company's shares fell by 5.7% following a 14% year-over-year decline in fourth-quarter fiscal 2025 earnings, attributed to increased production costs and tariff impacts, with earnings missing the Zacks Consensus Estimate by 0.8% [1] Financial Performance - Net sales from equipment operations increased by 14% year over year, exceeding the Zacks Consensus Estimate by 5.9%, but gross profit decreased by 2% due to a 21% rise in quarterly cost of sales [4] - Segment-wise performance showed a 10% increase in sales from the Production & Precision Agriculture unit, a 7% increase from the Small Agriculture & Turf unit, a 27% surge in Construction & Forestry sales, and a 2% rise in revenues from the Financial Services division [5] - Cash flow from operating activities was reported at $7.46 billion for fiscal 2025, down from $9.23 billion the previous year [5] - For fiscal 2026, the company anticipates net income in the range of $4.00-$4.75 billion, indicating a significant decline from the reported net income of $5.03 billion in fiscal 2025 [6] Industry Context - The U.S. agricultural sector has been facing challenges over the past few years, with conditions worsening since April 2025, leading to weak demand for large agricultural equipment and impacting revenue prospects for manufacturers like Deere [2] - ETF investors with significant allocations to funds holding Deere may need to reassess their portfolios to mitigate potential losses if the sector's demand continues to decline [2] ETF Insights - iShares MSCI Agriculture Producers ETF (VEGI) has assets of $85.7 million, with Deere holding a 25.5% weightage, and the fund has gained 11% year to date [7] - VanEck Agribusiness ETF (MOO) has assets of $578.8 million, with Deere at 8.15% weightage, and the fund has increased by 12.8% year to date [8] - Strive Natural Resources and Security ETF (FTWO) has assets of $53.2 million, with Deere at 8.32% weightage, and the fund has surged 38.7% year to date [9] - First Trust Indxx Global Agriculture ETF (FTAG) has assets of $6.2 million, with Deere at 10.01% weightage, and the fund has risen 12.9% year to date [11] - Global X AgTech & Food Innovation ETF (KROP) has assets of $6.30 million, with Deere at 11.84% weightage, and the fund has gained 8.2% year to date [12][13]

Group 1: Market Sentiment and Trends - Stocks are gaining momentum ahead of Thanksgiving, with bullish bets for 2026 increasing [1][2] - Kevin Hassett is emerging as the front-runner for the next Fed Chair, contributing to market optimism [16][19] - Investors are shifting towards more defensive corners of the equity markets amid ongoing competition [2] Group 2: Company Earnings and Performance - Deere's fiscal outlook for 2025 fell short of expectations, leading to a 4% drop in shares [3][11] - The company expects net income to decline over 10% next year, indicating a prolonged downturn in the North American agricultural sector [12] - NVIDIA shares have seen a significant decline of over 14% this month, but are experiencing a slight rebound [4][55] Group 3: Competitive Landscape in Technology - NVIDIA faces new competition from Google's TPU chips, raising concerns about its market share and investor sentiment [4][6] - Despite competition, many analysts still believe NVIDIA will remain a dominant player in the AI market [7][8] - Companies connected to Alphabet, like Broadcom, are performing well, while those tied to NVIDIA are struggling [9][10] Group 4: Economic Indicators and Consumer Behavior - The U.S. economy is expected to see moderate growth, with fiscal stimulus and a neutral Fed interest rate outlook [45] - Consumer confidence has dropped significantly, with 42 million Americans on food stamps, indicating a bifurcated consumer landscape [46][48] - Economic growth is primarily driven by middle and upper-income consumers, while lower-income consumers continue to face challenges [49][50] Group 5: Regulatory and Policy Implications - The potential nomination of Kevin Hassett as Fed Chair has raised questions about the independence of the Fed, but market reactions have been positive [18][22] - The U.S. has negotiated significant Medicare drug price cuts, which could impact pharmaceutical companies and overall healthcare costs [32] - The U.K. budget unveiling faced a premature release of information, revealing a fiscal cushion increase driven by new taxes [34][36]

Core Viewpoint - Deere & Co.'s first outlook for the upcoming fiscal year is below expectations, with net income projected between $4 billion and $4.75 billion, falling short of the average estimate of $5.31 billion [1] Group 1: Financial Performance - The projected net income for Deere & Co. is between $4 billion and $4.75 billion for the fiscal year starting November 1 [1] - This outlook has led to a decline in shares by as much as 4.6% before regular trading commenced in New York [1] Group 2: Market Conditions - The weak outlook is attributed to challenges faced by farmers, including low crop prices and the impact of tariff policies [2] - Despite a recent trade deal between the US and China aimed at increasing American crop shipments to Asia, uncertainty remains regarding its effectiveness in revitalizing the US farm economy [2] Group 3: Industry Sentiment - Rival manufacturer CNH Industrial NV has expressed concerns about the ambiguity of the trade deal, which contributes to uncertainty in the sector regarding farmer spending [3] - There is a belief within the industry that the resumption of US crop imports by China and an upcoming aid package for American farmers may provide support in 2026 [3]

Market Performance - US stocks experienced gains on the last trading day before Thanksgiving, with the Dow Jones Industrial Average increasing by 0.3%, the S&P 500 rising nearly 0.5%, and the Nasdaq Composite adding over 0.6% [1] - The market is on track for a fourth consecutive advance, driven by strong performance from technology stocks, particularly Alphabet, which reached a record high [2] Federal Reserve Insights - Investors are closely monitoring indicators that may influence the Federal Reserve's upcoming policy decisions, especially in light of a data drought caused by the US government shutdown [3] - The Federal Reserve's Beige Book, released on Wednesday, is expected to provide insights into regional economic performance, consumer spending, and the labor market ahead of the Fed's meeting in two weeks [3] Interest Rate Expectations - Markets are pricing in an over 80% probability of a quarter-point rate cut in December, following disappointing September readings on retail sales and wholesale inflation [4] - An update on weekly initial jobless claims is anticipated, with expectations of a slight increase [4] Corporate Earnings - Earnings reports peaked on Tuesday, with major retailers exceeding expectations, while Deere & Company saw its shares decline after providing a disappointing full-year outlook [6]

Market Performance - US stocks experienced an upward movement, with the Dow Jones Industrial Average rising by 0.8% and the S&P 500 also increasing by 0.8%. The Nasdaq Composite added nearly 1% following a significant 660-point gain in the Dow on Tuesday [1] - Stocks are on track for their fourth consecutive advance, driven by technology stocks, with Alphabet reaching a record high before slightly declining [2] Federal Reserve Insights - Investors are closely monitoring factors influencing the Federal Reserve's upcoming policy decisions, particularly in light of a data drought caused by the US government shutdown. The Fed's Beige Book is expected to provide insights into regional economic performance [3] - There is an over 80% probability priced in for a quarter-point rate cut in December, following disappointing September readings on retail sales and wholesale inflation. Initial jobless claims fell unexpectedly to their lowest level since April [4] Central Bank Leadership - Speculation regarding the leadership of the Federal Reserve is intensifying, with five finalists on President Trump's shortlist to replace Chair Jerome Powell. Kevin Hassett has emerged as the frontrunner as the selection process nears its conclusion [5] Earnings Reports - Earnings reports peaked on Tuesday, with major retailers exceeding expectations. However, Deere & Company saw its shares decline after providing a full-year outlook that fell short of market expectations [6]

Market Performance - US stocks experienced an upward movement, with the Dow Jones Industrial Average increasing by 0.3%, the S&P 500 rising nearly 0.5%, and the Nasdaq Composite adding over 0.6% [1] - The market is on track for its fourth consecutive advance, driven by strong performance from technology stocks, particularly Alphabet, which reached a record high [2] Federal Reserve Insights - Investors are closely monitoring indicators that may influence the Federal Reserve's upcoming policy decisions, especially in light of a data drought caused by the US government shutdown [3] - The Federal Reserve's Beige Book, released on Wednesday, is expected to provide insights into regional economic performance, consumer spending, and the labor market ahead of the Fed's meeting in two weeks [3] Interest Rate Expectations - Markets are pricing in an over 80% probability of a quarter-point rate cut in December, following disappointing September readings on retail sales and wholesale inflation [4] - Initial jobless claims fell unexpectedly to their lowest level since April, as reported by the Department of Labor [4] Corporate Earnings - Earnings reports peaked on Tuesday, with major retailers exceeding expectations, while Deere & Company saw its shares decline after providing a disappointing full-year outlook [6]

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Core Insights - CNH Industrial's brands, Case IH and New Holland, have been recognized for their excellence at the 2026 Farm Machine of the Year awards, held during Agritechnica in Hanover, Germany [10][19]. Awards and Recognitions - Case IH's Optum 440 won the 'Premium Tractor' category, featuring a powerful 8.7-liter engine and advanced technology for improved efficiency [11][22]. - New Holland's CX 8.90 PLMi received the award in the "Combine Harvester" category, equipped with advanced connectivity and real-time data transfer capabilities [12][22]. - The New Holland W170D Forage Power won in the "Material Handling" category, designed specifically for agricultural tasks with a 255 horsepower engine [13][22]. - New Holland's ForageCam™ was awarded in the "Smart Farming & Robotics" category, utilizing AI and camera sensors for enhanced livestock feed processing [14][15][22]. Company Strategy and Innovation - CNH's CEO, Gerrit Marx, emphasized the company's commitment to investing in crop cycle innovations that enhance customer efficiency, profitability, and sustainability [11][19]. - The awards highlight CNH's focus on integrating advanced technology and digital platforms, such as the Case IH FieldOps™ and New Holland's IntelliField™, to improve operational efficiency for farmers [12][14].