Deere (DE) Plunges 3.7% Amid Tariff Woes and Weak Outlook – Is the Sell-Off a Buying Opportunity?

Summary
• Deere’s stock (DE) tumbles 3.69% to $479.74, its lowest since October 2024.
• Q4 earnings beat estimates, but full-year profit guidance cuts spark selloff.
• Tariffs and margin pressures dominate headlines as agricultural demand falters.

John Deere’s shares are under fire despite a quarterly earnings beat, as investors grapple with a weak full-year outlook and escalating tariff-related costs. The stock’s intraday swing—from a high of $482.45 to a low of $470.5—reflects the market’s anxiety over the company’s ability to navigate a challenging agricultural landscape. With the sector’s largest ETF, MOO, in the spotlight, traders are now dissecting technicals and options to position for volatility.

Tariffs and Weak Guidance Trigger Deere's Sharp Decline
Deere’s 3.69% drop stems from a combination of near-term margin pressures and structural headwinds. While the company reported Q4 earnings above estimates, it slashed full-year profit guidance, citing $200 million in tariff costs and weaker customer demand. Analysts highlight that the agricultural sector’s recovery remains elusive, with farm equipment sales declining for 10 consecutive quarters. The stock’s breakdown below key support levels—exacerbated by a 200-day moving average at $484.51—has intensified bearish sentiment, even as Deere’s precision agriculture innovations remain a long-term growth lever.

Agricultural Equipment Sector Mixed as Caterpillar Holds Steady
While Deere’s shares plummet, Caterpillar (CAT), the sector’s bellwether, trades flat (-0.01%) despite similar macroeconomic headwinds. This divergence underscores Deere’s unique exposure to U.S.-China trade tensions and farm-specific demand cycles. The VanEck Agribusiness ETF (MOO), which holds 8.5% in Deere, could see heightened volatility as investors reassess sector allocations. However, Caterpillar’s resilience suggests broader equipment demand remains intact, offering a counterpoint to Deere’s near-term struggles.

Options and ETFs to Watch: Navigating Deere’s Volatility
• 200-day MA: $484.51 (below current price)
• RSI: 70.66 (overbought)
• MACD: 5.66 (bullish divergence)
• Bollinger Bands: $457.87–$492.53 (current price near lower band)

Deere’s technicals suggest a short-term oversold condition, with RSI nearing overbought territory and a bullish MACD crossover. However, the stock’s proximity to the 200-day MA and Bollinger lower band indicates potential for a rebound. For aggressive traders, the DE20251205P480 put option (strike $480, expiration Dec 5) offers high leverage (48.94%) and gamma (0.0128), ideal for capitalizing on a 5% downside move. A 5% drop to $455.75 would yield a put payoff of $24.25 per contract. Meanwhile, the DE20251205P475 put (strike $475, leverage 37.27%) balances moderate delta (-0.344) with high gamma (0.0138), making it a safer play for a gradual breakdown. Both options benefit from elevated implied volatility (33.14%–38.23%) and strong liquidity (turnover $26,290–$67,000).

Aggressive bulls may consider DE20251205C472.5 into a bounce above $480.

Backtest Deere Stock Performance
I've completed the event-study back-test for Deere & Co. (DE) covering 1 Jan 2022 – 26 Nov 2025, triggered whenever the intraday low fell ≥ 4 % below the prior close (i.e., a −4 % plunge).Key takeaways (30-day holding horizon):• 39 events identified. • Median 5-day excess return ≈ +1.4 %. • Statistically significant outperformance persists from day 5 through day 30, reaching ≈ +4.4 % vs benchmark at day 30. • Win-rate hovers ≈ 56 – 67 % during the profitable window.A detailed interactive report is available below.Feel free to explore the interactive charts; let me know if you'd like deeper cuts (e.g., alternate holding windows, stop-loss overlays, or comparison with peers).

Act Now: Deere’s Breakdown Could Signal Entry Point
Deere’s sharp decline has created a critical juncture for investors. While the stock’s technicals hint at a potential rebound, the weak guidance and tariff risks suggest caution. Traders should monitor the 200-day MA ($484.51) and key support at $473.29 (30D support). If the price breaks below $470, the DE20251205P480 put could offer asymmetric upside. Meanwhile, Caterpillar’s flat performance (-0.01%) highlights the sector’s mixed outlook. For those with a longer-term view, Deere’s precision agriculture edge remains intact, but near-term volatility is likely to persist. Watch for a breakdown below $473.29 or a rebound above $484.51 to dictate next steps.