DE or CNH: Which Equipment Maker Deserves a Spot in Your Portfolio?

Globe and Mail

30-06-2025

Deere & Company DE and CNH Industrial N.V. CNH are two leading global players in agricultural machinery, with Deere holding the top spot. In addition to their strong agricultural portfolios, both companies also have significant footprints in the construction equipment market.
Both DE and CNH stocks offer investors exposure to long-term megatrends such as precision farming, automation and infrastructure development. However, with the ongoing weakness in both the agricultural and construction markets, as well as tariff concerns, the question is which stock you should put your hard-earned money on.
To find out, let us dive into the fundamentals, growth prospects and challenges for both Deere and CNH Industrial to help identify the better pick for your portfolio.
The Case for Deere
Deere, known for its iconic green tractors, has a market capitalization of $139 billion. It specializes in agricultural, forestry and turf equipment, and has a strong presence in precision farming technology and construction equipment.
However, DE has faced headwinds, with revenues declining for seven consecutive quarters and earnings slipping in the last six, due to lower volumes in both the agriculture and construction businesses. Weak farmer sentiment, subdued by soft commodity prices, high input costs and elevated interest rates, has dampened demand for agricultural machinery. Trade uncertainty and high interest rates curtailed order activity for both construction and compact construction equipment.
Deere anticipates a challenging industry outlook to persist in fiscal 2025, particularly in the large agriculture equipment market in the United States and Canada, which is expected to decline 30%. The small agriculture and turf equipment market in the United States and Canada is projected to decline 10-15%. European agricultural markets are expected to decline approximately 5%, while South American agricultural markets are forecast to remain flat. The Asia market is expected to be down slightly.
Construction equipment demand is similarly under pressure. Deere expects a 10% drop in U.S. and Canadian construction equipment sales, with compact equipment down 5%. While infrastructure spending remains a tailwind, trade uncertainty and high interest rates are pressuring order activity for both construction and compact construction equipment. Global forestry equipment is forecast to be flat to down 5%, while the global roadbuilding market is expected to remain flat.
Over the long term, Deere is well-positioned for growth, underpinned by consistent investments in innovation and geographic expansion. The company remains focused on revolutionizing agriculture with technology in an effort to make farming automated, easy to use and more precise across the production process. Focus on launching products with advanced technologies and features provides it a competitive edge. The company just launched its large-size H Series forestry machines, designed to elevate productivity and fuel efficiency. These machines integrate enhanced hydraulic systems, an industry first.
The Case for CNH
CNH Industrial, with a market capitalization of approximately $16 billion, operates well-known agricultural equipment brands such as New Holland, Case IH and STEYR (in Europe). It also offers a full range of construction equipment under the CASE and New Holland Construction brands.
Like Deere, CNH has faced persistent challenges, with revenues declining for seven consecutive quarters and earnings falling over the last five. The downturn has been more severe in its Agriculture segment, where sales have been down for seven straight quarters, while the Construction segment has posted declines over the past five quarters.
For 2025, the company anticipates continued weakness in both segments. Global demand for agricultural equipment is expected to decline by 5–10% in 2025, while the Construction segment sales are forecast to fall by 4–15%. Overall, CNH expects its 2025 net sales to decline between 11% and 19% compared with 2024.
Despite these near-term pressures, CNH is making strategic strides in automation, autonomy, digital integration, alternative fuels and electrification to strengthen its presence in the precision technology space.
Its recent product launches, particularly in tractors and combines, feature in-house digital systems that improve operational efficiency and enhance the company's competitive position. In 2024, around 80% of CNH's precision components were developed internally, a figure expected to grow in 2025. The company is expanding its lineup of factory-installed tech solutions and increasing adoption of proprietary retrofit kits, which should support market share gains and improved margins over time.
How Do Estimates Compare for DE & CNH?
The Zacks Consensus Estimate for Deere's fiscal 2025 earnings is $18.82 per share, indicating a year-over-year fall of 26.54%. The 2026 estimate implies growth of 17.13%. While the estimates for fiscal 2025 have moved down, the same has moved up over the past 60 days.
The Zacks Consensus Estimate for CNH Industrial's 2025 earnings is 62 cents per share, indicating a year-over-year decline of 41%. The estimate for 2026 implies a rise of 37%. EPS estimates for both 2025 and 2026 have been trending south over the past 60 days.
(Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
DE & CNH: Price Performance & Valuation Comparisons
Year to date, DE stock has gained 21.2%, outperforming the Zacks manufacturing - farm equipment industry's 19.7% growth. CNH has, however, lagged both at 15%. Both DE and CNH stocks have outperformed the Industrial Products Sector's rise of 3.2% and the S&P 500's 4.4% gain.
DE & CNH's YTD Performance Against Industry, Sector & S&P 500
Deere is currently trading at forward 12-month earnings multiple of 24.49X, higher than its five-year median. CNH Industrial stock is currently trading at forward 12-month earnings multiple of 17.71X, higher than its five-year median.
CNH stock is also trading at a discount to the industry average of 22.80X, the sector's 19.45X and the S&P 500's 22.31X.
DE or CNH: Which Stock Deserves a Spot in Your Portfolio?
Both companies are facing near-term headwinds, reflected in their recent earnings results, downward estimate revisions and expectations for continued softness in upcoming quarters. Sluggish demand in both the agriculture and construction sectors continues to weigh on performance. However, looking long-term, both stocks are fundamentally tied to global megatrends such as rising food demand, advancements in agricultural technology and increased infrastructure investment.
Both Deere and CNH Industrial currently have a Zacks Rank #3 (Hold), which makes choosing one stock a difficult task. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
From a valuation standpoint, CNH appears more attractive currently, boasting a cheaper valuation and a Value Score of B compared with DE's Value score of D.
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Deere & Company (DE): Free Stock Analysis Report
CNH Industrial N.V. (CNH): Free Stock Analysis Report