Oppenheimer has increased its 12-month price objective for Deere & Company to $715, up from $531, while retaining an Outperform recommendation. The brokerage highlighted three primary drivers for the change: accelerating construction activity, an agricultural sector that is stabilizing, and a shift in analyst earnings revisions from negative territory into positive territory.
The firm noted a sharp market reaction to its call: Deere shares closed up 11.6% on the trading day the change was announced, while the S&P 500 slipped by 28 basis points. Oppenheimer characterized the pattern of upward earnings revisions as seeming to be in its early stages rather than near completion.
Oppenheimer acknowledged valuation will be a focus for some investors as Deere expands into a higher multiple. The firm said the elevated valuation is not without precedent but conceded it could provoke some pushback as the stock absorbs its extended multiple. At the time of the commentary, Deere was trading at a price-to-earnings ratio of 33.4. Independent analysis referenced within the broader market context indicated the shares appear overvalued relative to a calculated Fair Value. Related market indicators also prompted caution: tips signaled the relative strength index is in a range that some interpret as overbought, which could leave the stock vulnerable to near-term profit-taking.
Oppenheimer expressed confidence in the durability of the upgrade because it sees agriculture joining construction as a contributor to upside in the second half of the year. The firm identified Deere's excavator rollout at an industry trade show as an upcoming catalyst that could sustain momentum.
Financial results released for Deere's first quarter of 2026 supported the firm’s more constructive view. The company reported earnings per share of $2.42 versus an expected $2.02. Revenue for the quarter came in at $9.61 billion, ahead of the $7.59 billion forecast. Those outcomes produced an earnings surprise of 19.8% and a revenue beat of 26.61%.
Oppenheimer’s note balances optimism on cyclicality and product catalysts with caution on valuation dynamics. The firm signaled it would not be surprised to see some investors lock in gains in the near term, given stretched technical readings and the higher multiple implied by the new target.
Market context and implications
- Construction demand is a central pillar of the upgraded valuation case.
- Agriculture’s stabilization is viewed as an important complementary source of demand later in the year.
- Valuation and technical indicators could prompt short-term volatility despite a constructive earnings trend.