DE Taps Brazil's Agricultural Boom to Power Future Growth Trajectory

Deere & Company DE, at its Brazil Investor Day held yesterday, reaffirmed its commitment to fueling Brazil’s agricultural transformation. Deere’s long-standing presence, investments and technological innovations are positioning it as a key enabler of the country’s rise as a global “agricultural superpower.”

Corn and soy account for 90% of Brazil’s total grain production. The country leads globally in cotton exports and ranks third in cotton production. Over the next decade, Brazil’s agricultural production is expected to surge, soybeans by 46%, corn by 50%, sugarcane by 20% and cotton by 38%, making it a strategic market for Deere. 

Expanding farming area by incorporating degraded, underutilized land and double cropping practices will aid this growth. While double cropping has productivity advantages, timing and precision are crucial to maximize yield and reduce production costs. This is where Deere’s precision solutions play a major role. 

Poor cell coverage is an issue in Brazil. Deere has been investing in partnerships and developing satellite-based solutions to enable real-time data and operations management. The company expects its connected machines to grow from 17 in 2020 to 200 by 2030.

Over the past 25 years, Deere has made strategic investments in Brazil and currently has eight factories, four facilities and one R&D center. Its product portfolio has significantly diversified beyond the single soybean customer segment served in 2004. 

Over the 2009-2024 timeframe, Deere’s tractor market share in Brazil has almost doubled, the combine market has grown 1.5 times, planter market has increased 2.5 times and the sprayer market share has grown two times. The company’s $100 million expansion of its Catalão factory is enabling local SEE & SPRAY production. Deere also made its largest-ever product launch in Brazil at this year’s Agrishow. 

Deere’s strategic alignment with Brazil’s agricultural growth makes it a compelling investment story rooted in innovation, scale and long-term value creation. 
Over the past few years, players like AGCO Corporation AGCO and CNH Industrial CNH have also heightened their focus on the Brazilian market. 

CNH Industrial’s New Holland brand celebrated 50 years of supporting farmers in Brazil at Agrishow 2025. CNH Industrial showcased multiple innovative products, including new T8 high-horsepower tractors, a special TL5 tractor and a complete sprayer lineup, including developments in drones and the Latin American début of the award-winning CR10/CR11 combines. Defensor 2500, 2500 Sugarcane, 3500 sprayers and the debut of the Defensor 4000, feature the latest CNH Industrial’s sprayer range. 

South America accounts for about 11% of AGCO’s sales, largely driven by Brazil, where it has a strong manufacturing presence. In February 2025, AGCO announced the opening of two new facilities in Jundiaí, Brazil- the Reman Transmissions Center of Excellence and the new AGCO Academy headquarters. With an investment of $3.2 million, the Reman Transmission Center of Excellence will increase opportunities for farmers to have access to high-quality, sustainable products at lower prices. As agriculture advances through digital and technological innovation, technical expertise becomes vital for sustained growth, and the AGCO Academy is set to play a pivotal role in building that capability.

DE’s Price Performance, Valuation & Estimates

DE shares have gained 21.9% so far this year compared with the industry’s 21% growth. In comparison, the Zacks Industrial Products sector has dipped 0.4%. The S&P 500 has gained 1.7% in the same time frame.

Deere is currently trading at a forward 12-month price/earnings (P/E) ratio of 25.11X compared with the industry average of 23.46X. With a Value Score of D, DE stock does not appear to be a compelling value proposition at these levels.

The Zacks Consensus Estimate for DE’s fiscal 2025 earnings indicates a year-over-year decline of 26.5%. The consensus mark for revenues implies a drop of 15% for the year. The earnings estimate for fiscal 2026 indicates 17% growth, with revenues rising 7.3%.

The earnings estimate for Deere for 2025 has moved down 2.59% while the same for fiscal 2026 has moved up 1.2% over the past 60 days.

Deere stock currently carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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