Deere Heads Into Earnings with Options Traders Turning Cautious

Deere & Company enters its November 25 earnings report with the stock up 4.1% on the week to $665.83, yet options traders have quietly shifted more defensive than usual, creating an interesting contrast with what remains a broadly bullish analyst view.

The clearest tension this week sits in options positioning. The put/call ratio has climbed to 1.10, above its 20-day average of 1.06 and running at a z-score of 1.3, the highest defensive lean seen in several weeks. That is not an extreme reading by historical standards, the 52-week high is 1.28, but the direction of travel is worth noting: the PCR has drifted upward from around 1.00 in late October. Options traders appear to be buying more downside protection as the earnings date approaches. Lending conditions tell a completely different story. Borrow availability is exceptionally loose at 2,137%, meaning there are roughly 21 shares available to lend for every one already borrowed. Short interest has also continued its gradual decline, sitting at 1.9% of free float after falling nearly 10% over the past month. The cost to borrow has eased to 0.37%, its lowest level in over six weeks. By any measure, there is no short-side pressure building in the lending market.

The Street broadly leans positive on the name, though conviction has some gaps. Most recent analyst moves following August's quarterly print were upgrades and target raises: Evercore ISI upgraded to Outperform with an $813 target and Baird moved to Outperform at $800, while multiple others lifted targets into the $700s. JP Morgan remains more cautious, maintaining a Neutral rating with a $625 target after raising it in early October. That target sits notably below the current $665.83 price, while the consensus mean of $694 implies modest upside from here. The bull case centres on the 24% year-over-year rise in Small Ag and Turf sales and the 34% jump in Construction and Forestry, with the earthmoving order book up 50% from the prior quarter. Bears focus on margin compression: Equipment Operations operating margin declined 180 basis points to 5.9%, with negative operating cash flow from equipment operations and ongoing tariff costs as the headwind. Factor scores lean bullish on earnings momentum, with EPS momentum ranks at 99 (30-day) and 96 (90-day), and a forward earnings revision factor at the 90th percentile. Value metrics remain stretched: the P/E has pulled back roughly seven points over the past month to 24x, but EV/EBITDA has also eased, suggesting some of that valuation pressure has softened as the stock came off its highs.

One institutional data point stands out in the ownership register. Capital Research and Management added nearly 3.9 million shares in the quarter ending September 30, a meaningful build that takes them to 6.8% of shares outstanding. Wellington Management also added 1.4 million shares over the same period. Those are sizeable incremental positions from long-only institutions, adding weight to the fundamentally constructive lean in the ownership base.

Deere's most recent earnings print, in August, produced an 11.5% single-day gain. The May print moved the stock down 5.6%. The two readings are pointing in opposite directions, which makes the November 25 report genuinely difficult to read from historical pattern alone. What to watch heading in: whether margin guidance for fiscal 2027 acknowledges any tariff relief, and whether the Construction and Forestry order momentum continues to translate into shipments.