Deere Plunges 4.7% Amid Earnings Optimism and Guidance Dismay: What’s Fueling the Selloff?

Summary
• Deere (DE) tumbles 4.74% to $474.51, 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.

Deere’s stock is 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 $487.82 to a low of $469.77—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.

Earnings Beat vs. Guidance Dismay: The Contradictory Forces Driving Deere’s Slide
Deere’s 4.74% drop stems from a dissonance between short-term performance and long-term expectations. While the company reported Q4 earnings of $3.93 (beating estimates of $3.83) and $12.9 billion in sales (32% above forecasts), it slashed full-year profit guidance to below $17.60 per share, a 9% miss relative to Wall Street’s $19.32 forecast. CEO John May’s admission that 2026 will mark the 'bottom of the large ag cycle' compounded investor unease. Tariff costs of $200 million and weak customer demand further eroded confidence, overshadowing the earnings beat.

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.

Navigating Deere’s Volatility: Technicals and Options for the Aggressive Trader
• 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 (strike $480, expiration Dec 5) offers high leverage (90.82%) and gamma (0.0212), 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 59.37%) balances moderate delta (-0.515) with high gamma (0.0203), making it a safer play for a gradual breakdown. Both options benefit from elevated implied volatility (23.24%–24.97%) and strong liquidity (turnover $103,458–$238,930). Aggressive bulls may consider DE20251205C472.5 into a bounce above $480.

Backtest Deere Stock Performance
It looks like the data-retrieval attempt for Deere & Co. (ticker: DE) returned empty results because the source did not supply a properly indexed daily OHLC price series (“Index must be named (e.g., ‘date’)”). Without valid price data we cannot identify –5 % intraday‐plunge events or run the requested back-test yet.Here are two options to move forward:1. Retry the download from an alternative data provider (still via the same tool) but explicitly request a standard “Daily OHLC (open, high, low, close, volume)” dataset with a correctly labeled Date index. 2. If you already have DE’s daily price data available locally (for example, exported from Bloomberg, Yahoo, etc.), you could upload it, and we can proceed directly from that file.Please let me know which approach you prefer—or share any specific data source you’d like me to target—and I’ll take care of the rest.

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. Sector leader AGCO (AGCO) is down 3.97%, signaling broader ag equipment sector fragility.