Deere vs. AGCO Corp: Which Farm Equipment Stock Is the Better Buy Now?

Deere & Company DE and AGCO Corporation AGCO are two well-known names in the agricultural machinery industry, with both companies producing a wide range of farm equipment.

The U.S. Department of Agriculture forecasts a 0.7% year-over-year dip in net farm income to $153.4 billion in 2026. Total crop receipts are expected to inch up 1.2%, driven by higher corn and hay receipts. In inflation-adjusted terms, total crop receipts are predicted to fall 0.7%. Total production expenses are expected to increase 1%, with livestock/poultry purchases, feed and labor to be the three major expense categories.

Pesticide, fuel and oil expenses are likely to decline, while property taxes, fees and electricity costs are expected to rise. Direct government farm payments are anticipated to offer some relief, rising by $13.8 billion from that reported in 2025 to $44.3 billion in 2026.

Amid this backdrop, to determine which stock may be the better investment at this time, it is important to examine the fundamentals, growth opportunities and potential risks facing Deere and AGCO.

The Case for Deere

Deere, known for its iconic green tractors, has a market capitalization of $155 billion. It specializes in agricultural, forestry and turf equipment, and has a strong presence in precision farming technology and construction equipment.

Deere returned to positive revenue growth in the fourth quarter of fiscal 2025, with the metric rising 11% on higher volumes after eight consecutive quarters of declines. This positive streak continued in the first quarter of 2026, with revenues increasing 17.5% from the prior-year quarter.

However, earnings fell year over year as increased production costs and tariff-related pressures offset higher shipment volume gains. The company reported nine consecutive quarters of year-over-year decreases in net income. Even though Deere increased its net income guidance for fiscal 2026 to $4.5-$5 billion, the range indicates a 6% year-over-year decrease at the mid-point.

Despite near-term weakness, agricultural equipment demand will be supported by increased global demand for food, stemming from population growth.

Over the long term, Deere is well-positioned for growth, underpinned by consistent investments in innovation and geographic expansion. Its focus on launching products with advanced technologies and features provides it with a competitive edge. The company remains focused on revolutionizing agriculture with technology in an effort to make farming automated, easy to use and more precise across the production process.

The company acquired construction technology company Tenna in February 2026 with the aim of scaling and growing the business using Tenna's customer-focused mixed-fleet model. The deal also aligns with Deere's broader strategy to expand the Construction & Forestry business.

The Case for AGCO

AGCO Corp, with a market capitalization of $8.6 billion, is a manufacturer and provider of agricultural machinery and precision agriculture technology. The company’s brand portfolio includes leading brands like Fendt, Massey Ferguson, PTx and Valtra.

AGCO’s earnings returned to growth in the fourth quarter of 2025 after declining for seven consecutive quarters. The company expects 2026 sales to be $10.4-$10.7 billion, indicating year-over-year growth of 4%.

In North America, AGCO expects sales volumes of large agricultural equipment to be down 15% and small agricultural equipment to be flat to up 5%. In Western Europe, sales will likely be flat to 5% and sales in Brazil will likely be flat.

AGCO has been making aggressive production cuts, implementing cost control and restructuring actions. The company closed the sale of the majority of its Grain & Protein business to focus on core agricultural equipment.

Nonetheless, AGCO will benefit from growth in the Precision Planting business and the Fuse suite of products as farmers see the benefit of these high-tech solutions. The company expects to deliver precision agriculture net sales of $2 billion by 2029 and outgrow the industry by 4-5% annually. It expects a 14-15% adjusted operating margin at mid-cycle by 2029. The company expects to negate tariff impacts with planned mitigation actions. It plans to mitigate lower sales volumes with cost controls and stable engineering expenses.

The company is focusing on strategic transformation, wherein it intends to streamline and focus its portfolio of agricultural machinery and precision ag technology solutions. In line with this, on Apr. 1, 2024, AGCO Corp formed a joint venture with Trimble to form PTx Trimble. PTx Trimble is now a new company with an 85% stake in AGCO and a 15% stake in Trimble.

How Do Estimates Compare for DE & AGCO?

The Zacks Consensus Estimate for Deere’s fiscal 2026 earnings is $17.97 per share, indicating a year-over-year fall of 2.8%. The 2027 estimate implies growth of 27.9%. Both estimates have moved up over the past 60 days.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for AGCO’s 2026 earnings is $5.78 per share, indicating a year-over-year decline of 9.5%. The estimate for 2027 implies a rise of 38%. EPS estimates for both 2026 and 2027 have been trending up over the past 60 days.

Image Source: Zacks Investment Research

DE & AGCO: Price Performance & Valuation Comparisons

The DE stock has gained 21% in a year compared with AGCO’s growth of 24%.

Image Source: Zacks Investment Research

Deere is currently trading at a forward 12-month earnings multiple of 28.90X. The AGCO stock is currently trading lower, at a forward 12-month earnings multiple of 18.69X. AGCO is also trading at a discount to the industry average of 27.26X.

Image Source: Zacks Investment Research

DE or AGCO: Which Is the Better Pick?

Both Deere and AGCO Corp are grappling with subdued farmer sentiment, which has reflected on their results. Despite these headwinds, AGCO has outpaced Deere in terms of price performance.

From a valuation standpoint, AGCO is more attractive currently, trading at a lower multiple. Given these factors, AGCO appears to be a more compelling investment choice right now. Both stocks have a Zacks Rank #3 (Hold) currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Free Report: Profiting from the 2nd Wave of AI Explosion

The next phase of the AI explosion is poised to create significant wealth for investors, especially those who get in early. It will add literally trillion of dollars to the economy and revolutionize nearly every part of our lives.

Investors who bought shares like Nvidia at the right time have had a shot at huge gains.

But the rocket ride in the "first wave" of AI stocks may soon come to an end. The sharp upward trajectory of these stocks will begin to level off, leaving exponential growth to a new wave of cutting-edge companies.

Zacks' AI Boom 2.0: The Second Wave report reveals 4 under-the-radar companies that may soon be shining stars of AI’s next leap forward.

Access AI Boom 2.0 now, absolutely free >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Deere & Company (DE): Free Stock Analysis Report

AGCO Corporation (AGCO): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research