Deere, CNH stocks surge after Evercore ISI upgrade

Deere & Company (NYSE:DE) shares jumped 3.3% Thursday, while CNH Industrial NV (NYSE:CNH) surged 10% after Evercore ISI upgraded both agricultural equipment manufacturers to Outperform from In-Line.

The upgrades come as farm equipment stocks have rallied over the past two weeks, driven primarily by rising crop prices over the past three weeks. Evercore ISI analyst David Raso raised his price target on Deere to $813 from $632 and CNH to $18 from $12.50.

Raso cited several factors supporting the upgrade, including an aged and smaller U.S. high horsepower agricultural fleet following a three-year downturn, reduced channel inventory, and improving precision agriculture technology. The analyst noted that current crop prices, even if they decline slightly, could enable 2027 U.S. purchases to return to replacement demand levels for the first time in years.

The analyst projects 2027 earnings per share of $26.50 for Deere and $0.82 for CNH, with 2028 estimates at $33.05 and $1.15, respectively. These projections assume U.S. replacement demand buying represents combine harvester industry growth of 37% and high horsepower tractors growth of 27%.

Raso’s base modeling for 2027 includes very little help from below mid-cycle Brazil and European markets. The analyst suggested that even with the recent stock gains, history indicates the companies are only approximately one-fifth into traditional trough-to-peak stock gains.

The upgrade reflects Evercore ISI’s view that the agricultural equipment sector has established a foundation for recovery, with the investment thesis not dependent on continued crop price rallies. Deere shares are trading at 20-21 times the firm’s 2028 EPS estimate, while CNH trades at 12 times 2028 EPS.