SKN | Morgan Stanley Lifts Deere Price Target to $730, Sees Continued Outperformance

Key Takeaways

• Morgan Stanley raised Deere & Company’s price target to $730 from $560, a significant revision that signals stronger conviction in long-term earnings and valuation upside.

• The firm maintained its Overweight rating, reflecting expectations that Deere will continue to outperform despite cyclical agricultural headwinds.

• Deere’s pricing discipline, premium product mix, and cost control are seen as key factors supporting margin resilience in a moderating demand environment.

• Long-term growth is driven by precision agriculture, automation, and connected machinery, which expand recurring revenue opportunities and strengthen competitive positioning.

Major Target Increase Reflects Elevated Conviction

Morgan Stanley has raised its price target on Deere & Company to $730 from $560, maintaining its Overweight rating.

The $170 increase represents a substantial upward revision in valuation assumptions. Such a move typically signals stronger confidence in earnings durability, margin resilience, and long-term cash flow visibility rather than a marginal model adjustment.

Despite ongoing agricultural headwinds, Morgan Stanley believes Deere’s competitive advantages justify a higher benchmark.

Near-Term Resilience in a Cyclical Backdrop

Agricultural equipment demand remains tied to crop prices, farm income, and commodity cycles. While sector fundamentals have shown signs of softening, Morgan Stanley argues that Deere’s pricing discipline, premium product mix, and cost management support profitability even in a moderating demand environment.

Relative to peers, Deere is viewed as better positioned to maintain margins through cyclical adjustments.

Structural Growth Through Technology

Beyond near-term cycle dynamics, Morgan Stanley highlights Deere’s leadership in precision agriculture and automation.

Investments in data-driven farming solutions, connected machinery, and advanced automation platforms create structural differentiation. These capabilities not only enhance equipment productivity but also expand recurring revenue opportunities through software and services.

Over time, technology integration may support both customer retention and pricing power, strengthening the company’s competitive moat.

Market Implications

A significant target increase combined with a maintained bullish rating typically reinforces investor confidence.

The revision suggests Morgan Stanley views Deere’s valuation expansion as grounded in fundamentals rather than speculative momentum. The move may also signal expectations that long-term structural drivers outweigh near-term agricultural softness.

Outlook

While agricultural markets remain sensitive to commodity pricing and global trade dynamics, Deere’s operational execution and technological leadership provide a foundation for sustained outperformance.

Continued adoption of precision and autonomous farming solutions, alongside disciplined capital allocation, will likely determine whether the stock sustains its upward trajectory toward the revised target.

For confidential discussions regarding cyclical industrial positioning, precision agriculture technology valuation, and long-term automation investment themes, our senior advisory team is available for discreet consultation tailored to institutional and cross-border mandates.