John Deere is facing the crossroads in the middle of a demand reduction, increasing investment

John Deere He faces the crossroads because the company continues to see the weaker demand in the agricultural sector even as she committed to investing millions in American production and promised a brighter way ahead.

Agricultural machinery company warned At its fiscal earnings, the third quarter of last week calls to see a lot of softer demand, publishing significant years of cashing in net income and sales.

The company works in a position in the greater agricultural sector, which saw growing challenges with growing costs, the impact of climate change, labor shortages and more.

Farmers also deal with lower prices on crops such as corn and grains and dropped their consumption as a result. In return, the target audience of Deere has withdrew its willingness to buy new agricultural equipment.

Deere also hit tariff costs, assessments to be able to take $ 600 million in a fiscal 2025. The company has been to date of 300 million dollars until today.

She was interrupted after signing up his earnings, the company confirmed CNBC that she announced 238 dismissals over his Illinois and Iowa factory, adding thousands set out over the year. The company cited reduced demand and lower order volumes as the main factors behind the decrease in the job.

“As stated on our last earnings call, Connomy AG still affects the accounts for John Deere equipment,” Deere CNBC said in the statement. “This is a challenging time for many farmers, breeders and manufacturers and directly affects our job in close time.”

The manufacturer employs more than 70,000 people globally.

However, Deere identified enough green shooting to point to a less worrying future.

To its latest calls for earnings, the managers of the company emphasized the growth of demand in Europe and South America after seeing weakness in North America. Despite the macroeconomic wind, Deereini president of his world agriculture and the division of lawns said the company remains secure in his future.

“We think it has a positive tail of the wind and what we see in trading jobs, and we think there are positive tail winds from what we see in tax policy,” Cori Reed said.

And in June, the company published a statement that “Mit broke” any claims that Deere could close his American production due to the fall of demand. Instead, the company said it made it a “courageous move” to invest 20 billion dollars in US production in the next 10 years in the next 10 years.

Follows a similar series of announcements of companies trying to do their own “Made in the US“Bona Fides from the President Donald Trump took the function. Before choosing Trump He threatened Deere With 200% tariffs if he transferred production to factories in Mexico.

“During the next decade, we will continue to make significant investments in our core American market,” said John General Manager statement In June. “This underlines our commitment to innovation and grow during the costs of cost-competitive in the global market.”

Oppenheimer analyst Kristen Oven wrote last week to stay Bullash about Deere and expects to increase confidence in 2026. years, Telling CNBC To believe that the company leads “appropriate carefully optimistic outlook”.

Even the Truistic Jamie Cook analyst, who decreased his target last week and emphasized an uncertain view for 2026. years, he still believes that this year marks the bottom for the company’s earnings.

The company’s cattle has seen almost 30% increases during a one-year period.

Looking at the history of Deere and hit that the agricultural industry in the last few years, Davidson Analyst Michael Shliski said CNBC that he could not imagine that the company goes much lower here.

“The way I would say that 2025. could be the worst, the lowest sales of tractors in the history of modern agriculture,” he said, with the potential to swing the trend to turn before it becomes immediate.

While optimism may not be directly translated today with sales, Shliski said that “hints” of progress were sufficient to excite him because of the company’s future, including growth in Europe and South America.

“When parts of the world do better, parts that don’t work and probably won’t follow,” Shliski said.

Although it is not commented directly at the latest round of dismissal, Shliski said that investors would be surprised to see the necessary cost reduction measures at this point.

Similarly, Morgan Stanley Analysts wrote that although demand can be reduced, they are behind a thesis that Deere is DNA earnings and that the company remains a “attractive opportunity longer term”

Analyst Angel Castillo told CNBC that Deere and the agricultural sector were on large cyclical, so as short-term prospects for the company would probably be bounced, noticing that it will take special farming.

“This is one of the unique areas in which we think that even if there are more challenges next year, because we are somewhat expected at risk, earnings is much more risked or is already trapped by expectation,” Castillo said.

With its latest cost reduction measures, Deere is saved by not by holding over or creating the topic of the supply chain, Castillo added.

“The reality is today that we are still in an unsafe environment and I think they are managing discipline, rational ways to try not to create a worse life environment,” he said.