The Rising Influence of Rising Affluence

[DewDiligence]

DE reports FY4Q25* results—guides_to_lower FY2026 profits:

https://s22.q4cdn.com/253594569/files/doc_financials/2025/q4/DE-Q425-News-Release.pdf

Agricultural equipment comprises about 70% of DE’s non-financial revenue, and the large-ag market has been in a serious funk. DE now projects that FY2026 will mark the bottom of the large-ag cycle. DE expects modest FY2026 uptrends in its small-ag and construction segments, but not enough to offset the decline in the large-ag segment.

Consequently, DE today issued guidance for FY2026 profit of $4.0-4.75B, -6% to -20% versus FY2025 actual profit of $5.03B (and well below Wall Street’s consensus of $5.3B). The FY2026 guidance includes an expected $1.2B pre-tax headwind from tariffs, about double the amount in FY2025.

On a GAAP basis, the above FY2026 guidance equates to EPS of $15.38-$18.27 (based on 260M diluted shares), down from FY2025’s actual $18.50.

At the current share price (~$483 as I’m typing), the FY2026 guidance equates to a P/E range of ~26-31x.


DE FY4Q25 CC slides:
https://s22.q4cdn.com/253594569/files/doc_financials/2025/q4/DE-4Q25-Earnings-Call-Slides.pdf

*DE’s fiscal years end on the Sunday closest to Oct 31.