Shares of Deere & Company climbed to an all-time high after the company reported stronger-than-expected earnings and lifted its full-year profit forecast. The move signals growing confidence that parts of the equipment cycle may be stabilizing, even as large farm machinery demand remains under pressure.

For its fiscal first quarter, Deere reported earnings of $2.42 per share and net income of $656 million. While those figures were lower than the same period a year ago, they exceeded Wall Street expectations. More importantly, Deere raised its full year net income forecast to a range of $4.5 billion to $5 billion, up from its prior estimate of $4 billion to $4.75 billion.

CEO John May struck an optimistic tone in the earnings release. “We are encouraged by the ongoing recovery in demand within both the construction and small agriculture segments,” May said. He added that the company believes 2026 “represents the bottom of the current cycle” and positions Deere for improved performance ahead.

Construction Comes Back Strong

A major driver behind the improved outlook is Deere’s Construction and Forestry division. After facing headwinds in recent quarters, the segment is seeing renewed demand tied to infrastructure activity and broader economic resilience.

The company now expects approximately 15% growth in Construction and Forestry this year, an upward revision from earlier projections. That strength has helped offset softness in the Production and Precision Agriculture segment, where large equipment purchases remain subdued.

Market analysts described the earnings beat as being supported by stronger shipments and improved cost control. The construction rebound, in particular, helped reassure investors that Deere can generate solid earnings even while the farm sector works through its cyclical downturn.

Signs of Life in Agriculture

Although large ag equipment demand remains cautious, Deere’s outlook suggests improving conditions in certain areas of the farm economy.

Deere sees strengthening in its Small Agriculture and Turf segment. The company expects growth there as producers and rural landowners continue investing in smaller equipment categories.

John May emphasized the broader picture, saying that Deere’s results reflect “continued execution in a challenging environment” and improving demand trends in key segments.

Outside forces may also be contributing to the shift in sentiment. Analysts pointed to rising soybean prices and increased U.S. agricultural exports to China as factors helping stabilize the outlook. Reports indicate China could purchase more U.S. commodities than earlier expected, supporting demand expectations.

Biofuels Policy Adds Potential Tailwind

Another important variable is the renewable fuels policy. Anticipation around higher biofuel blending targets for 2026 has lifted expectations for corn and soybean demand. If federal policy ultimately supports stronger renewable fuel usage, that could provide meaningful support to crop prices.

Higher commodity prices historically lead to stronger farm income, and stronger farm income tends to translate into equipment purchases. While it may take time for that to fully materialize in high-horsepower tractor and combine sales, the foundation for recovery appears to be forming.

Why This Matters to Farmers and Dealers

For farmers, Deere’s record share price reflects investor belief that the equipment cycle is nearing a turning point. No one is declaring a full recovery in production ag yet. But if 2026 marks the bottom of the cycle, as Deere’s leadership suggested, the next move would likely be upward.

For dealers, this news improves confidence. Stronger construction equipment demand keeps manufacturing activity moving. Improving small ag sales help support dealership throughput. And a stabilizing outlook in production agriculture provides better planning visibility.

When the largest equipment manufacturer in the world raises its forecast and says it sees the bottom forming, that carries weight.

Deere’s all-time high share price signails that construction strength, improving export demand, and potential biofuels policy support may be aligning to create better conditions ahead for farmers, dealers, and rural America.