John Deere-Why Deere Stock Is Down Today

Core Viewpoint - Investor sentiment towards Deere & Co. has declined due to an analyst downgrade and the announcement of new tariffs on agricultural products by President Trump, which could negatively impact the company's growth prospects [1][2][4]. Company Summary - Analysts at R. W. Baird downgraded Deere's stock rating from outperform to neutral, maintaining a price target of $501 per share, indicating only an 8% upside from the stock's recent closing price [2]. - Despite optimism regarding Deere's inventory management and expected earnings growth in 2026, the analyst sees limited upside potential due to recent stock rebounds and broader uncertainties in the agricultural sector [3]. - Deere reported a significant 30% year-over-year drop in sales and a 50% decline in net income for the first quarter, reflecting a challenging business environment [6]. - The company has reiterated its net income outlook of$ 5 billion to $5.5 billion for 2025, which would represent a nearly 22% decrease from 2024 at the highest end of its guidance [6]. Industry Summary - President Trump's tariffs on external agricultural products, effective April 2, are intended to support the domestic agriculture industry but pose a threat to companies like Deere, which relies heavily on international sales [4][5]. - China, the largest importer of U.S. agricultural products in fiscal 2023, has announced retaliatory tariffs on various imported goods from the U.S., further complicating the market landscape for agricultural equipment manufacturers [4]. - Approximately 34% of Deere's total sales and revenue originated from outside the U.S. and Canada in 2024, making the company vulnerable to the impacts of tariffs and geopolitical tensions [5].