During the October 2 episode of Mad Money, host Jim Cramer expressed strong confidence in Deere & Company (NYSE:DE) when a caller asked about the company amid rising corn prices. Cramer described Deere as "sensational," highlighting its long-term performance and reliability. He noted that the company has been a standout performer since he first invested in it during the 1987 crash, praising its "unbelievable machines."
Deere & Company reported signs that the agricultural equipment downturn may be nearing its bottom. In its August 20 earnings release, management cited early orders, improving used-equipment inventories, and greater adoption of advanced technologies as reasons for optimism about 2026. The company also raised its fiscal-year net income forecast to between $4.75 billion and $5 billion. Other business segments, such as construction and forestry, showed significant growth, with sales increasing 18% and operating profit rising 84% in the fiscal third quarter.
Despite these positive indicators, Deere faces challenges in the large agricultural equipment market, which is expected to decline between 15% and 20% in fiscal 2026. The company's own Production & Precision Agriculture sales are projected to fall approximately 10%. Analysts note that Deere's valuation at 32.4x forward earnings is a substantial premium compared to peers like CNH Industrial and AGCO, which trade at 24.5x and 18.1x, respectively. This premium leaves limited room for disappointment if the recovery takes longer than expected.
According to Insider Monkey's database, hedge fund ownership of Deere slipped slightly in Q2, with 59 funds holding the stock compared to 62 in Q1. The Bill & Melinda Gates Foundation Trust remained the largest hedge fund holder with nearly 3.56 million shares. Short interest stood at 2.08% of the public float. While Cramer's long-held confidence in Deere is evident, investors are paying a premium for that reputation, and the next stage of the story will depend on a stronger recovery in the agricultural business.