Citi raises Deere stock price target to $550, maintains Neutral rating

On Monday, Citi analyst Kyle Menges updated the firm’s outlook on Deere & Company (NYSE:DE), increasing the price target to $550 from the previous $450, while keeping a Neutral rating on the stock. The adjustment follows Deere’s financial results for the second quarter of the fiscal year, which prompted Citi to revise its 2025 adjusted earnings per share (EPS) estimate upwards to $18.75 from $18.44.

Menges’ revised model takes into account Deere’s recently updated guidance and the company’s performance in the second quarter, which exceeded expectations. The higher price target reflects a combination of improved margin projections for Deere’s Production & Precision Agriculture (PPA) segment, slightly tempered by reduced expectations for the Construction & Forestry (C&F) division.

During the earnings call, Deere indicated signs of "stabilization" in the North American agriculture market. However, concerns such as high inventories of used high horsepower equipment, the elevated prices of new machinery, and a subdued forecast for farmer profitability led Menges to maintain a cautious stance on the stock.

The new price target is also based on a higher multiple, which Menges stated reflects a growing confidence that 2025 could represent the low point for global agricultural demand. Despite the price target increase, Citi’s Neutral rating persists, suggesting that the firm’s outlook on Deere’s medium-term earnings potential is less optimistic than that of many investors.

In other recent news, Deere & Company reported second-quarter earnings for fiscal year 2025 that exceeded expectations, with earnings per share (EPS) reaching $6.64 against the forecasted $5.56. The company’s revenue also surpassed projections, totaling $12.76 billion compared to the anticipated $10.98 billion. Following these strong results, multiple analyst firms adjusted their outlooks for Deere. Bernstein raised its price target to $548 while maintaining a Market Perform rating, noting the company’s effective inventory management and potential growth into 2026. DA Davidson reaffirmed its Buy rating with a $542 target, highlighting the impressive performance of Deere’s Production and Precision Agriculture segment. Raymond (NSE:RYMD) James increased its price target to $560, citing Deere’s resilience against tariff-related costs and strong performance in the Production & Precision Agriculture segment. Truist Securities also raised its price target to $619, maintaining a Buy rating and emphasizing the company’s robust order book and plans to increase prices for certain products in 2026. These developments underscore Deere’s strategic focus on cost management and innovation in precision agriculture technologies.

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