Deere shares have lagged industrials even as earnings hold up

Deere & Company’s stock has been underperforming the Industrials complex in recent months, according to a June 1 Barchart analysis that framed DE as a “big-cap” bellwether for farm and construction equipment. The column said DE traded 19.6% below its 52-week high of $674.19 reached Feb. 19, and it fell 13.9% over the prior three months, trailing the State Street Industrial Select Sector SPDR ETF (XLI), which was down 2.3% over the same window.

Looking further out, the Barchart piece also compared year-long performance, saying DE was up 6.7% over the past 52 weeks, while XLI was up 21.4%. It further noted the stock was above its 200-day moving average, a common market technical indicator that traders use to gauge longer-term momentum, but it had been below its 50-day moving average since the prior month.

A key timing point in the analysis was Deere’s Q2 2026 earnings report released May 21. Barchart said the shares declined 5.2% after that release. It reported revenue of $13.4 billion and an adjusted earnings per share (adjusted EPS, a profitability metric that excludes certain items) of $6.55, both of which it said were above Wall Street expectations, while also flagging a drop in operating margin (operating margin, a measure of operating profit as a share of revenue).

Deere’s own earnings release showed net income of $1.773 billion, or $6.55 per share, for the quarter ended May 3, 2026. The company reported worldwide net sales and revenues of $13.369 billion for the quarter, up 5% year over year. Deere also reiterated a full-year net income outlook range of $4.5 billion to $5.0 billion for fiscal 2026. In the company’s statement, John May, chairman and CEO, pointed to execution across segments and highlighted strength in the Small Ag and Construction & Forestry divisions during the current market environment.

Wall Street’s posture, as reflected in the Barchart article, remained cautious but not bearish. Among 24 analysts covering DE, the column cited an overall “Moderate Buy” consensus, with a mean price target of $651.11. It characterized that target as implying 20.1% upside from then-current levels, even as it acknowledged the stock’s relative weakness versus the Industrials ETF.

Sector context matters for Deere because its equipment sales tend to move with the agricultural and construction cycles. When farmers and contractors delay capex (capital spending), equipment volumes can soften, and the market often prices that risk quickly. Deere’s diversification across categories like farm machinery, turf and compact equipment, construction and forestry equipment, and financial services can sometimes buffer downturns, but investors still watch segment trends and margins for confirmation that the cycle is bottoming or improving.

Still, several details that would help explain the underperformance were not laid out in the Barchart column. It did not break down which Deere segments or regions were driving the recent relative lag, and it did not provide a valuation comparison versus industrial peers beyond a high-level note about Caterpillar’s one-year performance. Deere’s earnings release, while including financial results and a net income guidance range, did not fully resolve questions about when the broader equipment cycle will strengthen, and the company offered limited segment-level commentary in the material reviewed here. Investors are likely to look next at Deere’s earnings call materials and any updated guidance discussion for clues on demand trends and margin durability.