Track market-moving stories before they get noisy

Are you seeking stability or value in the household goods market? Comparing Procter & Gamble (PG +0.86%) and Clorox (CLX 1.51%) reveals two distinct paths for conservative investors today.

Procter & Gamble is a global behemoth with a massive portfolio of diverse household brands, while Clorox focuses on specialized cleaning and wellness products with a smaller footprint. Both are defensive stalwarts, yet their scale and balance sheet health vary significantly.

The case for Procter & GambleProcter & Gamble operates through ten distinct categories, including grooming, health care, and beauty. Its products reach consumers in over 180 countries, making it one of the largest consumer staples companies by market cap. While its global reach is wide, the company depends heavily on Walmart for approximately 16% of its sales. Customer concentration like this adds a layer of risk to the business, as any change in shelf space or pricing terms could impact results.

In its 2025 fiscal year, ended June 30, revenue reached $84.3 billion, representing a slight growth of 0.3% compared to the prior year. Net income for the period was $15.7 billion, yielding a net margin of 19%. This margin, which measures the percentage of revenue remaining after all expenses are paid, indicates how much profit is generated from each dollar of sales.

As of the June 2025 balance sheet, the debt-to-equity ratio was 0.7x. This metric compares total debt to shareholder equity, indicating how much of the company is funded by lenders versus owners. The current ratio, which measures the ability to pay short-term debts with liquid assets, was 0.7x. Free cash flow for the year was $14 billion, representing cash from operations minus money spent on capital expenditures.

The case for CloroxThe Clorox Company maintains a portfolio focused on cleaning, wellness, and household convenience. Its brands, such as Pine-Sol, Glad, and Burt's Bees, are staples in many homes and professional settings. Like its larger peer, the company faces significant customer concentration, with Walmart accounting for nearly 27% of fiscal 2025 sales. Such heavy reliance on a single retailer can make the business vulnerable to changes in purchasing patterns or retail floor-space allocations.

During its 2025 fiscal year, which also ended June 30, revenue was $7.1 billion, reflecting a modest growth of about 0.2% over the previous year. Net income for the fiscal period reached $810.0 million, compared to just $280.0 million in the prior year. This performance led to a net margin of 11.4%, which measures how efficiently the firm turns revenue into profit after taxes and costs.

Based on its June 2025 financial report, the debt-to-equity ratio was 9.0x. This indicates a high level of debt relative to shareholder equity, which is a common point of analysis for capital-intensive companies. The current ratio stood at 0.8x, a metric that helps investors assess short-term liquidity and the ability to cover immediate bills. Free cash flow for the year was $761.0 million, calculated as operating cash flow minus expenditures on physical assets.

Risk profile comparisonProcter & Gamble faces intense competition from global rivals such as Unilever. These competitors often battle for shelf space and consumer loyalty through aggressive marketing and pricing. The company also deals with geopolitical instability and trade controls, which can disrupt global manufacturing networks. Furthermore, cyber-attacks or IT failures pose a constant threat to its complex international operations.

Clorox deals with heavy competition from both name brands and lower-priced private label products. Larger competitors such as Colgate-Palmolive may have more financial resources to capture market share. The company is also exposed to supply chain volatility, particularly regarding the cost of raw materials like resin and energy. Geopolitical conflicts and inflation also threaten to squeeze profitability if higher costs cannot be passed to consumers.

Valuation comparisonClorox currently trades at a lower P/S ratio relative to both its larger rival and its expected Forward P/E.

MetricThe Procter & GambleThe CloroxSector BenchmarkForward P/E20.8x17.4x25.5xP/S ratio4.0x1.6xSector benchmark uses the SPDR XLP sector ETF. Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.

Choosing to invest in Procter & Gamble or Clorox is a good move to add defensive stocks to a portfolio. However, neither is a high-growth company, so investors would be buying primarily for their dividend income.

From that perspective, Procter & Gamble offers a robust dividend yield of 2.9% as of May 28. Clorox provides a far higher dividend yield of 5.1%, which makes it appear to be the better buy. But there’s an important consideration here.

The ability to pay dividends is determined based on available free cash flow (FCF). Procter & Gamble generates robust FCF. In its latest fiscal quarter, ended March 31, the company produced adjusted FCF of $3.0 billion, an increase over the prior year’s $2.8 billion. Rising FCF is a good sign that Procter & Gamble can not only maintain its dividend, but afford to raise it as well.

Clorox generates much lower FCF, but it grew FCF to $761 million in fiscal year 2025 compared to $483 million in 2024. The company is also undertaking initiatives to reduce its expenditures and streamline operations, which point to the potential for further improvements in FCF.

But given Procter & Gamble‘s far greater FCF amount, it would be my choice to invest in over Clorox, even though the latter has the higher dividend yield.

Clorox Chief Executive Officer Linda Rendle is stepping down for health reasons after more than 20 years at the company.

The Clorox Company (CLX) Presents at 23rd annual dbAccess Global Consumer Conference Transcript

Key Takeaways Fastly's security revenues rose 47% YoY to $38.8M, hitting 22% of total revenues in Q1. Next-Gen WAF led, but DDoS Protection, Bot Management and API Discovery gained traction with new customers. Seven-figure security deals and smaller wins supported growth as AI bot traffic and shadow API risks rose. Fastly, Inc. (FSLY - Free Report) delivered a strong first-quarter 2026 performance in its security business, with security revenues increasing 47% year over year to $38.8 million. Security accounted for 22% of total revenues in the quarter, reaching record levels for the company. The segment also grew 9% sequentially, marking the fourth straight quarter of accelerating security revenue growth.

Fastly’s security momentum is becoming stronger. Its Next-Gen WAF remained a core driver, but newer products also gained traction. These include DDoS Protection, Bot Management, and API Discovery and Inventory. Among instances of security products sold to new customers in the quarter, almost half came from these newer offerings. This indicates that Fastly’s security portfolio is expanding beyond one flagship product and gaining relevance across a wider set of customer needs.

Customer activity also supported the security growth story. Fastly closed multiple seven-figure deals that included security, while smaller wins also contributed. This suggests the quarter’s growth was not associated with just one isolated transaction.

AI-related traffic and security risks are also adding to the relevance of Fastly’s tools. ContentGuard was added by a long-standing media customer facing daily malicious AI bot traffic, while API security tools were positioned to help address shadow API risks as AI speeds up code delivery.

Fastly’s security business is becoming a more meaningful part of the company’s revenue mix. With stronger adoption across both established and newer security products, the segment’s momentum reflects improving product depth, broader customer engagement and a clearer role for security within Fastly’s platform strategy.

NET and AKAM Benefit From Rising Security and AI DemandCloudflare, Inc. (NET - Free Report) reported fourth-quarter 2025 revenues of $614.5 million, up nearly 34% year over year, while full-year revenues increased about 30% to $2.17 billion. Management highlighted strong demand related to AI, enterprise security and connectivity workloads. Cloudflare also noted that large customer revenues grew 42% year over year and accounted for 73% of total revenues. NET continues to see traction across its Zero Trust, application security and Cloudflare Workers offerings.

Akamai Technologies, Inc. (AKAM - Free Report) also reported steady security momentum in its latest quarter. Akamai Technologies’ fourth-quarter 2025 revenues increased 7% year over year to $1,095 million. Akamai Technologies’ security revenues rose 11% year over year to $592 million, while Guardicore Segmentation and API Security revenues jumped 36% to $90 million. These figures show that AKAM continues to see demand for cybersecurity, API protection and segmentation offerings.

FSLY Stock Price Performance, Valuation & EstimatesShares of Fastly have surged a whopping 314.3% over the past year against the industry’s decline of 8%.

FSLY Price Performance Versus Industry
Image Source: Zacks Investment Research

From a valuation standpoint, FSLY trades at a forward price-to-sales ratio of 6.69, higher than the industry’s average of 3.8.

FSLY Valuation Compared to Industry
Image Source: Zacks Investment Research

© metamorworks / Shutterstock.com

Shares of Fastly (NYSE:FSLY) just earned a strong endorsement from Raymond James, which upgraded the edge cloud platform to Outperform from Market Perform with a $23 price target. The call lands in the wake of a 38% one-day decline that followed an in-line quarter, making this a clearly contrarian view. Raymond James argues the market overreacted and that an AI-driven traffic inflection is the dominant longer-term theme.

The split with peers is the story. Piper Sandler reiterated a Hold on Fastly stock the same week, framing the quarter as a thesis crack rather than a setup. For broader context on how analysts are positioning around AI infrastructure names, see our recent coverage of AI infrastructure analyst upgrades.

Ticker Company Firm Action Old Rating New Rating Old Target New Target FSLY Fastly Raymond James Upgrade Market Perform Outperform n/a $23 The Analyst’s Case Raymond James believes Fastly has reached an “inflection” in operational performance, with rising demand for its network capacity and security products. The firm sees AI-driven traffic increases continuing to benefit delivery networks with more advanced capabilities.

Crucially, the analyst points to structure. Fastly’s network runs through major interconnected data centers positioned to capture incremental AI and inference-related traffic as those workloads scale, an architectural moat the firm is willing to underwrite at $23.

Company Snapshot Fastly operates an edge cloud platform spanning Network Services, Security, and Compute & Observability. In Q1 2026, revenue grew 20% year over year to $173.02 million, with Security up 47% and Compute & Observability up 67%.

CEO Kip Compton stated that Fastly delivered “record revenue, gross margin, and RPO” in the quarter. Management raised full-year guidance to $710 million to $725 million in revenue, with non-GAAP EPS of $0.27 to $0.33.

Why the Move Matters Now Fastly stock closed at $19.50 on May 7 after the post-earnings selloff, well below its 52-week high of $34.82. The Raymond James $23 target sits just above the $22.75 consensus analyst target, reframing the post-earnings drawdown as opportunity rather than damage.

The bull case rests on CDN economics shifting in an AI-heavy traffic environment. Inference traffic is more compute-intensive than static content delivery, which favors Fastly’s edge compute and security stack. RPO of $369 million grew 63% year over year, and net retention ticked up to 113%.

What It Means for Your Portfolio For prudent investors, Fastly stock now sits at the center of a genuine analyst debate. The bear case from Piper Sandler centers on volume softness and pricing pressure in core delivery, alongside competition from hyperscaler-affiliated CDN alternatives. Customer concentration also remains elevated, with the top 10 customers representing 34% of revenue.

The bull case is the one Raymond James is buying: durable growth from AI traffic, edge compute monetization, and security cross-sell. With shares up 98% year to date despite the recent drop, position sizing matters.

When two reputable firms split this sharply on the same name in the same week, the narrative is in flux. Investors comfortable with usage-based volatility may find the risk/reward attractive at current levels, while more conservative readers might wait for the next quarter to settle the inflection question.

Fastly (FSLY) is rated a buy, with a fair value estimate of $30 versus a current price of $20.50, driven by accelerating growth and robust fundamentals. FSLY posted Q1 2026 revenue of $173M (+20% YoY), security revenue up 47% YoY, net retention rate at 113%, and RPO up 63% YoY to $369M. Management raised 2026 revenue guidance to $710–$725M and EPS guidance by 15%, signaling fundamental earnings model reset and durable growth trajectory.

Fastly (FSLY - Free Report) appears an attractive pick, as it has been recently upgraded to a Zacks Rank #2 (Buy). This upgrade is essentially a reflection of an upward trend in earnings estimates -- one of the most powerful forces impacting stock prices.

A company's changing earnings picture is at the core of the Zacks rating. The system tracks the Zacks Consensus Estimate -- the consensus measure of EPS estimates from the sell-side analysts covering the stock -- for the current and following years.

Individual investors often find it hard to make decisions based on rating upgrades by Wall Street analysts, since these are mostly driven by subjective factors that are hard to see and measure in real time. In these situations, the Zacks rating system comes in handy because of the power of a changing earnings picture in determining near-term stock price movements.

Therefore, the Zacks rating upgrade for Fastly basically reflects positivity about its earnings outlook that could translate into buying pressure and an increase in its stock price.

Most Powerful Force Impacting Stock PricesThe change in a company's future earnings potential, as reflected in earnings estimate revisions, has proven to be strongly correlated with the near-term price movement of its stock. That's partly because of the influence of institutional investors that use earnings and earnings estimates for calculating the fair value of a company's shares. An increase or decrease in earnings estimates in their valuation models simply results in higher or lower fair value for a stock, and institutional investors typically buy or sell it. Their transaction of large amounts of shares then leads to price movement for the stock.

For Fastly, rising earnings estimates and the consequent rating upgrade fundamentally mean an improvement in the company's underlying business. And investors' appreciation of this improving business trend should push the stock higher.

Harnessing the Power of Earnings Estimate RevisionsAs empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock movements, tracking such revisions for making an investment decision could be truly rewarding. Here is where the tried-and-tested Zacks Rank stock-rating system plays an important role, as it effectively harnesses the power of earnings estimate revisions.

The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here >>>> .

Earnings Estimate Revisions for FastlyFor the fiscal year ending December 2026, this cloud software developer is expected to earn $0.29 per share, which is unchanged compared with the year-ago reported number.

Analysts have been steadily raising their estimates for Fastly. Over the past three months, the Zacks Consensus Estimate for the company has increased 24.3%.

Bottom LineUnlike the overly optimistic Wall Street analysts whose rating systems tend to be weighted toward favorable recommendations, the Zacks rating system maintains an equal proportion of "buy" and "sell" ratings for its entire universe of more than 4,000 stocks at any point in time. Irrespective of market conditions, only the top 5% of the Zacks-covered stocks get a "Strong Buy" rating and the next 15% get a "Buy" rating. So, the placement of a stock in the top 20% of the Zacks-covered stocks indicates its superior earnings estimate revision feature, making it a solid candidate for producing market-beating returns in the near term.

You can learn more about the Zacks Rank here >>>

The upgrade of Fastly to a Zacks Rank #2 positions it in the top 20% of the Zacks-covered stocks in terms of estimate revisions, implying that the stock might move higher in the near term.

Key Takeaways FSLY's Q1 2026 security revenues rose 47% to $38.8M, reaching 22% of total revenues. FSLY is selling beyond Next-Gen WAF into DDoS, Bot Management and API Discovery, driving new wins.FSLY net retention improved to 113% from 100%, as customers expand into broader multi-product deployments. Fastly, Inc. (FSLY - Free Report) is increasingly demonstrating that its cross-selling strategy is becoming a meaningful growth driver as the company expands customer adoption across its network, security and compute portfolio. The first quarter of 2026 showed that FSLY is not only adding products to its platform but also turning customer relationships into broader multi-product deployments.

The trend became particularly visible in the first quarter as Fastly’s broader security stack gained traction alongside its core web application firewall business. Security revenues jumped 47% year over year to $38.8 million and accounted for 22% of total revenues. The growth was supported by new customer wins as well as expansion within the existing customer base.

Fastly is now seeing enterprises adopt multiple security products simultaneously rather than entering through a single offering. Demand expanded beyond the company’s flagship Next-Gen WAF into newer products such as DDoS Protection, Bot Management and API Discovery and Inventory. Almost half of the security product instances sold to new customers during the quarter came from these newer offerings.

The strategy is also translating into larger deal sizes and broader deployments. A leading digital payment conglomerate expanded its relationship with Fastly by adding 10 new products and services, while a global social media corporation selected Fastly in a cross-sell security win tied to securing global API traffic.

Customer expansion trends continued to strengthen. Fastly’s trailing 12-month net retention rate improved to 113% from 100% a year ago, reflecting higher spending across a broader range of customers. The latest quarter indicates that Fastly’s broader platform is helping deepen customer adoption, with security cross-sell, multi-product deployments and improved net retention pointing to stronger wallet-share capture across its customer base.

What Do the Latest Metrics Say About Fastly?Fastly, which competes with Akamai Technologies, Inc. (AKAM - Free Report) and Cloudflare, Inc. (NET - Free Report) , has seen its shares rally 120.7% over the past year against the industry’s decline of 12.4%. Shares of Akamai Technologies and Cloudflare have gained 89% and 33.6%, respectively, in the aforementioned period.

Image Source: Zacks Investment Research

From a valuation standpoint, Fastly's forward 12-month price-to-sales ratio stands at 3.4, lower than the industry’s 3.81. The company is trading at a discount to AKAM (with a forward 12-month P/S ratio of 4.57) as well as NET (24.44). 

Image Source: Zacks Investment Research

Fastly, Inc. (FSLY) Presents at 46th Annual William Blair Growth Stock Conference Transcript

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New Fastly Research Reveals Rapidly Growing AI Traffic is Reshaping the Internet, Driving Need for Machine Traffic Strategies

SAN FRANCISCO--(BUSINESS WIRE)--Fastly, Inc. (NASDAQ: FSLY), a leading global edge cloud platform, today released new research showing that AI-generated traffic is emerging as a distinct layer of internet activity, requiring organizations to rethink how they manage automated requests, protect infrastructure, and capture value from machine interactions.

Analysis of traffic across Fastly's global network found that AI requests grew approximately 30% between January and May 2026, which is about 6.5 times faster than human traffic during the same period. While AI traffic continues to grow in importance, Fastly's research suggests the more significant shift is how AI systems interact with digital infrastructure.

The findings point to a new reality for businesses: while stopping bad bots remains important, organizations increasingly need to think and act strategically to capture the growing value from automated interactions.

Fastly's research highlights several emerging trends:

Organizations are making increasingly strategic decisions about AI traffic management, balancing content protection, visibility, customer acquisition, and digital distribution, which can influence whether AI systems discover, reference, and surface their content and ultimately how customers find and engage with their business. Machine traffic now represents a significant share of internet activity, including AI crawlers, AI fetchers, bots, agents, and API-driven systems. AI traffic takes many forms, with crawlers and fetchers showing different patterns, purposes, and demands on infrastructure. AI fetchers and agents are becoming increasingly important, as AI assistants retrieve real-time information to answer questions, compare options, validate facts, and complete tasks on behalf of users. "AI traffic is fundamentally changing how the internet operates," said Artur Bergman, Founder and Chief Technology Officer at Fastly. "Businesses are moving beyond a world where humans are the primary users of digital experiences. The challenge is no longer simply blocking bots, it's understanding which machine interactions should be accelerated, managed, challenged, or stopped."

The research also identified two distinct categories of AI traffic – AI crawlers and AI fetchers. AI crawlers systematically gather information from the web to build and update AI models, while AI fetchers retrieve information in response to specific user requests through AI assistants and emerging agentic applications. Based on May 2026 data, these workloads also place different demands on infrastructure, with more than half (51%) of AI requests requiring origin access compared to less than 9% for human requests. Fastly also observed AI traffic growing at an exceptional rate, with Claude-related traffic increasing by more than 555% compared with its January 2026 baseline.

The findings suggest that AI traffic management is evolving from a security and infrastructure concern into a broader business strategy. As organizations evaluate how AI systems interact with their content, applications, and APIs, visibility and control are becoming increasingly important.

Fastly's analysis also highlights a growing divergence in how organizations are responding to AI traffic. In one case, a large company instituted a hard block against a sudden spike in AI fetcher traffic, most likely to maintain content authority. Another large company chose not to block AI agents, resulting in an increase in fetcher volume over multiple months and potentially greater visibility with AI-powered services. These examples illustrate how decisions about AI traffic can influence not only access to content, but also customer engagement in an increasingly agent-driven internet.

The research points to three foundational elements of an effective machine traffic strategy: visibility into which AI systems are interacting with digital properties, context around how those systems behave and whether they create business value, and the precision to respond differently based on intent and impact. Fastly helps customers execute that machine traffic strategy at the edge. In the path of every request, Fastly delivers the visibility, context, and precision required to balance performance, security, bot management, and origin access with real-time intelligence.

To get more detailed insights, read our blogs at fastly.com.

About Fastly

Fastly’s powerful and programmable edge cloud platform helps the world’s top brands deliver online experiences that are fast, safe, and engaging through edge compute, delivery, security, and observability offerings that improve site performance, enhance security, and empower innovation at a global scale. Compared to other providers, Fastly’s powerful, high-performance, and modern platform architecture empowers developers to deliver secure websites and apps with rapid time-to-market and demonstrated, industry-leading cost savings. Organizations around the world trust Fastly to help them upgrade the internet experience, including Reddit, Universal Music Group, and SeatGeek. Learn more about Fastly at https://www.fastly.com, and follow us @fastly.

Forward-looking statements

This press release contains “forward-looking” statements that are based on Fastly’s beliefs and assumptions and on information currently available to Fastly. Forward-looking statements may involve known and unknown risks, uncertainties, and other factors that may cause its actual results, performance, or achievements to be materially different from those expressed or implied by the forward-looking statements. These statements include, but are not limited to, those regarding expectations regarding the future growth, velocity, and composition of AI and automated traffic; the adoption rates and scale of agentic workloads and AI assistants; the behavioral patterns of AI crawlers and fetchers; the impacts of automated requests on web infrastructure; and the performance, capabilities, and expectations regarding customer experiences with Fastly’s products and services, including Fastly Bot Management. Except as required by law, Fastly assumes no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future. Important factors that could cause our actual results to differ materially are detailed from time to time in the reports Fastly files with the Securities and Exchange Commission (“SEC”), including in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 and our Quarterly Reports on Form 10-Q. Copies of reports filed with the SEC are posted on Fastly’s website and are available from Fastly without charge.

More News From Fastly, Inc.

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Fastly and Skyfire Partner to Enable Trusted Agentic Commerce with Verified Identity at the Edge Fastly (NASDAQ: FSLY), a leader in global edge cloud platforms, and Skyfire, the agentic commerce platform providing identity and payment infrastructure for AI agents, today announced a new partnership that enables trusted agentic commerce at the edge. Skyfire has integrated its identity and payment-backed credentials into Fastly’s programmable edge cloud platform so enterprises can now securely identify, verify, and transact with AI agents in real time and at global scale, without re-architecting existing infrastructure.

As AI agents increasingly browse, negotiate, and complete transactions autonomously, businesses face a fundamental challenge: they must distinguish trusted, revenue-generating agents from malicious automation, in real time for billions of transactions. Together, Fastly and Skyfire can transform AI agent traffic from a potential security risk into an accountable, monetizable channel. This innovative solution uses enhanced intelligence to verify the AI agents, which can save customers valuable development time, while also automatically identifying which agents to trust and which to block.

Skyfire verifies the identity and the ability to pay for valid non-human requests while providing a resilient, secure and high-performance platform where decisions are made and enforced in real time and at global scale. Its developer-friendly, programmable architecture ensures that organizations have the flexible infrastructure that can adapt to business necessities. Additionally, it provides the open protocol and payment infrastructure designed specifically for AI agents and is complementary to Fastly’s AI Bot Management and Application Security (AppSec) solutions.

“AI agents are rapidly becoming autonomous consumers of APIs, content, and commerce,” said Amir Sarhangi, CEO of Skyfire. “The question for enterprises isn’t whether agents will show up – it is whether they can identify them and build sustainable business models around them. Our mission with Fastly is to integrate our verified agent identity and payment-backed credentials directly into the edge layer, transforming agent traffic from anonymous automation into accountable economic activity.”

With Skyfire’s protocol identity and payment-backed credentials and Fastly’s global distributed edge network, identity verification and payment validation can occur in milliseconds at the edge, making the solution faster, more reliable, and secure. This intelligent architecture enables enterprises to:

Identify who is behind every agent request with verified, tokenized Know Your Customer (KYC) credentials with real-time decisioning. Apply identity-based policies, limits, and pricing dynamically with programmable control over agent behavior without backend redesign. Maintain global scalability and resilience for high-concurrency agent traffic. Ensure compatibility with existing APIs, authentication systems, and checkout flows. "Many enterprises running on Fastly’s network are already seeing autonomous agents show up in their traffic, and those gaining an advantage are the ones treating that traffic as an economic signal, not just a security event,” said Jeff Alpen, Vice President of Global Partner Ecosystems at Fastly. “Our open platform enables us to deliver practical, immediate value by supporting key ecosystem integrations, such as Skyfire’s identity and payment capabilities. Together with Fastly’s AI Bot Management and Application Security solutions, the end result is customers being able to verify who's behind an agent request and attach real commercial value to it without rearchitecting their existing architecture."

About Fastly

Fastly’s powerful and programmable edge cloud platform helps the world’s top brands deliver online experiences that are fast, safe, and engaging through edge compute, delivery, security, and observability offerings that improve site performance, enhance security, and empower innovation at a global scale. Compared to other providers, Fastly’s powerful, high-performance, and modern platform architecture empowers developers to deliver secure websites and apps with rapid time-to-market and demonstrated, industry-leading cost savings. Organizations around the world trust Fastly to help them upgrade the internet experience, including Reddit, Universal Music Group, and SeatGeek. Learn more about Fastly at https://www.fastly.com, and follow us @fastly.

About Skyfire

Skyfire is the complete agentic commerce platform for AI agents and businesses. The platform provides everything agents need to securely access, transact, and pay across websites, APIs, and digital services, including tokenized Know Your Agent (KYA) identity, programmable payments, stablecoin wallets, and tokenized credit cards. Skyfire enables enterprises to transform AI agents from anonymous automation into trusted participants in the digital economy, unlocking new revenue streams while maintaining security and compliance. Learn more at https://skyfire.xyz.

View source version on businesswire.com: https://www.businesswire.com/news/home/20260610660439/en/

Deere DE shares are experiencing a significant decline following its fiscal Q2 earnings report, despite exceeding expectations on both revenue and earnings. Investors are worried about ongoing weakness in demand for large agricultural equipment and declining profitability in the Production & Precision Ag segment.

Key highlights from the earnings report include:

Total net sales and revenues rose 5% year-over-year to $13.37 billion, with Equipment Operations net sales increasing 5.4% to $11.78 billion, surpassing the FactSet consensus estimate of $11.55 billion. Diluted earnings per share (EPS) reached $6.55, exceeding the consensus estimate of $5.70, although it was slightly lower than the $6.64 reported in the same period last year. Production & Precision Agriculture net sales fell 14% year-over-year to $4.50 billion, with operating profit dropping to $706 million from $1.15 billion due to reduced farm demand and challenging crop economics. Deere maintained its forecast for a 15-20% decline in U.S. and Canada large agricultural industry volumes for FY26, highlighting ongoing softness in the farm equipment cycle. Small Agriculture & Turf net sales increased 16% year-over-year to $3.49 billion, with operating profit at $574 million, driven by healthy demand despite rising production costs. The Construction & Forestry segment showed impressive growth, with net sales jumping 29% year-over-year to $3.79 billion and operating profit rising to $561 million from $379 million last year. Deere raised its FY26 Construction & Forestry sales growth outlook to approximately 20% from the previous 15%, reflecting strong trends in infrastructure and compact construction demand. Operating margin guidance for FY26 in Production & Precision Ag was maintained at 11-13%, below the FY25 level of 15.4%, while Construction & Forestry margins are projected at 10-12%. Dealer inventory levels remained stable, particularly for combines, indicating prudent management of channel inventories by Deere.Analysts note that DE's performance was better than expected, primarily driven by strong results in the Construction & Forestry segment and resilient demand in Small Ag. The reaffirmation of full-year earnings guidance amidst pressures in large agricultural markets suggests that the downturn may be stabilizing. Additionally, the raised growth outlook for Construction & Forestry is a positive sign, although challenges in Production & Precision Ag persist due to lower crop prices and weaker cash flows impacting large equipment purchases. Stable dealer inventories and improving retail trends in certain areas further support the notion that agricultural conditions are becoming more manageable. Overall, DE is demonstrating solid cost discipline and operational resilience while capitalizing on increasing infrastructure-related demand.

This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].

Key Takeaways Deere posted Q2 EPS of $6.55, topping estimates as equipment sales rose 5.4% y/y.DE's Construction & Forestry sales jumped 29%, while Small Ag & Turf sales climbed 16%.Deere maintained fiscal 2026 net income guidance of $4.5-$5B despite weaker ag demand. Deere & Company (DE - Free Report) reported second-quarter fiscal 2026 (ended May 3, 2026) earnings of $6.55 per share, beating the Zacks Consensus Estimate of $5.81. However, the bottom line fell 1.4% from the prior-year quarter.

Net sales from Deere’s equipment operations were $11.78 billion in second-quarter fiscal 2026, up 5.4% from the year-ago quarter’s $11.17 billion, reflecting solid execution in Small Ag & Turf and Construction & Forestry. The top-line beat the Zacks Consensus Estimate of $11.44 billion.

Total net sales and revenues (including Financial Services and other income) rose 5% year over year to $13.37 billion. Top-line growth was driven by higher shipment volumes and favorable currency translation in key segments, partly offset by softer Production & Precision Ag volumes and higher production costs.

Deere’s Profits Decline in Q2On a consolidated basis, cost of sales increased 8.6% year over year to $8.27 billion, outpacing the 5% rise in net sales. Research and development expenses grew 6.2% to $583 million, while selling, administrative and general expenses inched up 1% to $1.21 billion.

Total operating profit decreased 3.1% year over year to $2.237 billion.

DE’s Segmental Performances in Q2The Production & Precision Agriculture segment’s net sales declined 14% year over year to $4.50 billion due to lower shipment volumes, partially offset by favorable foreign currency translation. Segment operating profit fell 39% from the year-ago quarter to $706 million, reflecting lower shipment volumes and higher production costs, partially offset by favorable foreign currency exchange.

Small Agriculture & Turf net sales increased 16% year over year to $3.49 billion on higher shipment volumes and favorable foreign currency translation. Operating profit rose 25% year over year to $719 million, driven mainly by higher shipment volumes and favorable price realization.

Construction & Forestry net sales were $3.79 billion, up 29% year over year, primarily on higher shipment volumes and favorable foreign currency translation. Operating profit improved 48% year over year to $561 million, aided by higher shipment volumes and favorable price realization, partially offset by higher production costs.

Revenues in Deere’s Financial Services division were $1.37 billion in the quarter, down 1% year over year. The segment’s operating profit increased 21% year over year to $251 million. Net income for Financial Services climbed 18% year over year to $190 million in the fiscal second quarter.

Deere’s Q2 Cash PositionBalance sheet and cash-flow metrics were supportive. Cash and cash equivalents were $7.905 billion as of May 3, 2026, and inventories were $8.188 billion. For the first six months of fiscal 2026, net cash provided by operating activities was $1.04 billion, up from $0.57 billion in the prior-year period, reinforcing Deere’s financial flexibility through a choppier demand environment.

DE Maintains 2026 Profit ViewDeere maintained its forecast for net income attributable to the company for fiscal 2026 at $4.5-$5 billion.

Net sales for Production & Precision Agriculture are expected to decrease 5-10% year over year. Sales of Small Agriculture & Turf are expected to rise 15%. Sales of Construction & Forestry are projected to increase 20%. The Financial Services segment’s net income is expected to be $860 million.

Deere’s Share Price PerformanceShares of the company have gained 10.3% in the past year compared with the industry’s 7.2% growth.

Image Source: Zacks Investment Research

DE’s Zacks RankThe company currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

A Look at Deere’s Peer PerformancesLindsay Corporation (LNN - Free Report) delivered earnings per share of $1.15 in second-quarter fiscal 2026 (ended Feb. 28, 2026, missing the Zacks Consensus Estimate of $1.60. The bottom line decreased 53% year over year.

Lindsay generated revenues of $158 million, down from $187 million in the year-ago quarter. The top line missed the Zacks Consensus Estimate of $165 million.

AGCO Corp. (AGCO - Free Report) reported an adjusted EPS of 94 cents in first-quarter 2026 compared with the prior-year quarter’s 41 cents. The reported figure topped the Zacks Consensus Estimate of 44 cents.

AGCO revenues increased 14.2% year over year to $2.34 billion in the March-end quarter. The top line beat the Zacks Consensus Estimate of $2.30 billion.

CNH Industrial N.V. (CNH - Free Report) registered first-quarter 2026 earnings of a penny per share, down 90% year over year. The reported number was in line with the Zacks Consensus Estimate.

CNH Industrial’s revenues were $3.83 billion, down 0.1% from the year-ago quarter. The top line beat the consensus estimate of $3.78 billion by 1.11%, aided by favorable currency impacts and pricing actions.

HIVE Weaponizes Power for an AI PivotDeere & Company NYSE: DE reported higher second-quarter sales and maintained its full-year profit outlook, as strength in construction equipment and Small Ag & Turf helped offset continued weakness in large agriculture markets.

On the company’s earnings call, Director of Investor Relations Chris Seibert said Deere delivered year-over-year net sales growth of 5% and an equipment operations margin of 16.9%, reflecting “solid execution and a strong, diversified portfolio of businesses spanning multiple industries and geographies.”

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Dollar at a 3-Year Low: 3 Exporters Quietly Printing MoneyFor the quarter, Deere reported net sales and revenues of $13.369 billion, up 5% from the prior year. Equipment operations net sales rose 5% to $11.778 billion. Net income attributable to Deere & Company was $1.773 billion, or $6.55 per diluted share.

The company maintained its fiscal 2026 net income forecast of $4.5 billion to $5 billion. Deere also continues to expect equipment operations cash flow of $4.5 billion to $5.5 billion. Its effective tax rate guidance is now 24% to 26%.

Tariff Refunds Boost Quarterly Margins 3 Agriculture Stocks to Buy as Food Inflation Stays Elevated in 2026A notable item in the quarter was a $272 million recovery tied to refund claims related to IEPA tariffs. Josh Beal, Deere’s director of investor relations, said the refund benefited production costs and lifted margins by nearly 2.5 percentage points in the quarter.

Beal said Deere’s direct tariff exposure remains approximately $1.2 billion on a full-year basis, or about a 3 percentage point margin headwind. Net of the refunds, the company’s forecast includes about $900 million of tariff costs for the year.

Chief Financial Officer Brent Norwood said Deere has not introduced tariff surcharges for customers and is instead focused on mitigation efforts including resourcing, reshoring, exemption submissions and USMCA compliance. Norwood said Deere’s implied net price realization for equipment operations is between 1.5% and 2% for the year, in line with general inflation excluding tariffs.

Norwood also highlighted Deere’s domestic manufacturing footprint, saying about 80% of John Deere’s U.S. complete goods sales are produced at U.S. facilities, and roughly 75% of components used at those facilities are sourced from U.S.-based suppliers.

Segment Results Show Diverging Cycles Deere’s Production and Precision Agriculture segment remained under pressure. Net sales fell 14% year over year to $4.503 billion, primarily due to lower shipment volumes, partially offset by favorable currency translation. Operating profit was $706 million, resulting in a 15.7% operating margin.

Small Ag & Turf posted stronger results, with net sales rising 16% to $3.485 billion, driven by higher shipment volumes and favorable currency translation. Operating profit rose to $719 million, and the segment delivered a 20.6% operating margin.

Construction & Forestry was the strongest growth segment in the quarter. Net sales increased 29% to $3.79 billion, supported by higher shipment volumes and favorable currency translation. Operating profit rose to $561 million, producing a 14.8% operating margin.

Norwood said Deere’s business segments are at different points in the cycle, with large agriculture operating below trough levels, Small Ag & Turf progressing toward mid-cycle and Construction & Forestry slightly above mid-cycle. Despite that, he said Deere is delivering double-digit margins across all segments and expects to grow its top line by more than 5% this year.

Market Outlook: Construction Strength Offsets Ag Weakness Deere continues to expect large agriculture equipment industry sales in the U.S. and Canada to decline 15% to 20%, citing elevated input costs and ongoing global market uncertainty. However, Seibert said robust commodity demand, potential tightening supply and U.S. government programs are providing some support for farmers.

The company lowered its South America outlook, now expecting tractor and combine industry sales to decline about 15%. Beal said the change reflects incremental softness in Brazil, where high interest rates, higher input costs and a stronger Brazilian real are pressuring grower profitability. He said the situation in Iran is affecting Brazilian growers at a sensitive point as they prepare to plant a new crop in September.

In the U.S. and Canada, Deere expects Small Ag & Turf industry demand to range from flat to up 5%. The company also expects European agricultural equipment demand to be flat to up 5%, while industry sales in Asia are projected to be roughly flat year over year.

Construction demand remains robust, Norwood said, supported by infrastructure spending, rental activity and accelerating data center investments. Deere now expects Construction & Forestry net sales to rise approximately 20% for the full year, and it increased the segment’s operating margin forecast to 10% to 12%.

Norwood said Deere’s U.S. and Canada construction order book has increased more than 60% since November and is at its highest level since April 2024, with more than 80% of production slots filled for the year.

Inventory Progress and Technology Investment Deere said it has continued to make progress managing inventories in large agriculture. Beal said new inventory levels for North American high-horsepower tractors and combines are down more than 50% from their mid-2024 peak, with inventory-to-sales ratios in line with historical averages.

Used inventories have also improved. Beal said North American used combine inventories are down by the mid-teens from their March 2024 peak, while used high-horsepower tractor inventories are also down by the mid-teens from the cycle peak. Used sprayer inventories are down approximately 30%, and planter inventories are down roughly 50% from recent peak levels.

Deere also emphasized ongoing investment in precision agriculture and new products. Beal highlighted new 8R and 8RX tractor models, ExactDepth and FurrowVision planting technologies, and expanded See & Spray capabilities for crops including wheat, barley and canola.

Beal said Deere has sold more than 12,500 JDLink Boost kits since launching its Starlink-supported satellite connectivity solution in the second half of 2024, with 25% growth in the latest quarter. He also said monthly active digital users have reached nearly 440,000.

Norwood said Deere returned $635 million to shareholders during the quarter through share repurchases and dividends. He said the company remains focused on disciplined capital allocation while continuing to invest through the cycle in products and technologies intended to help customers reduce inputs and improve productivity.

About Deere & Company NYSE: DEDeere & Company, commonly known by its brand John Deere, is a global manufacturer of agricultural, construction and forestry machinery, as well as turf care equipment and power systems. Founded in 1837 by blacksmith John Deere—who developed a polished steel plow to improve tillage in tough prairie soils—the company is headquartered in Moline, Illinois, and has grown into one of the largest and most recognizable names in equipment manufacturing worldwide.

The company's principal businesses include a broad portfolio of agricultural equipment such as tractors, combines, planters, sprayers, harvesters and tillage implements, complemented by precision agriculture technologies and telematics that support farm management, yield optimization and equipment connectivity.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

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Key Takeaways DE topped Q2 estimates with $1.773B net income on $11.78B sales, but large ag stayed pressuredDE booked a $272M IEEPA tariff refund, yet still expects about $900M of tariff costs this yearDE says 2026 is the ag-cycle bottom; N.A. high-hp tractor/combine inventories down 50% from mid-2024 peaks Deere & Company (DE - Free Report) used its second-quarter call to argue that portfolio balance, not a turn in large agriculture, is carrying the year. Management kept full-year net income guidance intact even as Brazil weakened and tariffs remained a material drag.

That steadiness mattered because the call centered less on the quarter’s headline beat and more on what executives said about demand, pricing, inventories and the path into 2027.

DE Keeps Net Income Guide IntactDE reported second-quarter net income of $1.773 billion, or $6.55 a share, on net sales of $11.78 billion. That topped the Zacks Consensus Estimate of $5.81 for earnings and $11.44 billion for revenues, producing surprise percentages of 12.74% and 2.98%, respectively.

Management did not frame the quarter as a broad-based acceleration. Instead, executives emphasized that the company is operating through different cycle positions across its businesses, with large agriculture still under pressure, while Small Ag & Turf and Construction & Forestry supported the enterprise.

Director of Investor Relations Christopher Seibert said equipment operations margin reached 16.9%, while management kept fiscal 2026 net income guidance at $4.5 billion to $5.0 billion. That unchanged outlook was a central message throughout the call.

Deere Sees Different Cycles Across UnitsCFO Brent Norwood said large agriculture is running below trough levels, Small Ag & Turf is moving toward mid-cycle and Construction & Forestry is slightly above mid-cycle. That framing helped explain why Deere kept stressing resilience rather than recovery.

Production & Precision Agriculture remained the weak point. Segment sales fell 14% to $4.503 billion and operating margin compressed to 15.7% from 22.0% a year ago, reflecting lower shipment volumes and higher production costs.

The offset came from the other segments. Small Ag & Turf posted 16% sales growth and a 20.6% operating margin, while Construction & Forestry delivered 29% sales growth and a 14.8% operating margin. Management repeatedly pointed to diversification as the reason the company can absorb ongoing agricultural softness.

DE Faces Same Tariff Burden After RefundA major swing factor in the quarter was a $272 million recovery tied to IEEPA tariff refund claims accepted by U.S. Customs and Border Protection. Josh Beal, director of investor relations, said that lifted equipment margins by nearly 2.5 points in the quarter.

Even so, management said the full-year direct tariff exposure is effectively unchanged at about $1.2 billion, or roughly a 3% margin headwind. Net of the refund, the company now expects about $900 million of tariff costs for the year.

Norwood’s tone on pricing was disciplined rather than aggressive. He said DE is not using tariff surcharges and expects implied equipment price realization of 1.5% to 2% for the year, in line with general inflation excluding tariffs. The mitigation plan centers on sourcing changes, exemptions, compliance work and cost actions.

Deere Gets More Constructive on DemandDeere raised its Construction & Forestry sales outlook to about 20% growth for fiscal 2026 and lifted that segment’s operating margin range to 10% to 12%. Norwood said order books in the United States and Canada are up more than 60% since November, with more than 80% of production slots filled.

Management tied that strength to infrastructure spending, rental fleet replacement, data center projects and roadbuilding demand. The company also said nearly all production slots for its new Deere-designed excavator are already spoken for.

Agriculture was more mixed. Seibert said the South American tractor and combine market is now expected to decline about 15%, versus the prior down 5% view, because Brazil is facing higher input costs, high interest rates and a stronger real. Outside South America, agriculture guides were largely unchanged.

DE Q&A Focuses on Inventory and 2027Analyst questions repeatedly tested whether the company is truly at the bottom of the ag cycle. In response, management sounded measured but consistent, saying fiscal 2026 still represents the bottom and that some recovery is expected in 2027.

Beal backed that view with inventory data. North American new inventories for high-horsepower tractors and combines are down more than 50% from mid-2024 peaks, while used combine and used tractor inventories are down by the mid-teens from peak levels.

Questions from Jefferies, Morgan Stanley and Raymond James also pressed on pricing and farmer behavior. Management acknowledged pressure from fertilizer and other inputs, especially in Brazil, but said dealer feedback and improving used inventory conditions support the company’s baseline recovery view for next year.

Deere Leans on Tech and DisciplineAnother theme was through-cycle investment. Management highlighted new 8R and 8RX tractor models, ExactShot and FurrowVision planting tools, and broader crop coverage for See & Spray as evidence that Deere is still investing heavily despite the ag downturn.

Executives also pointed to digital adoption. DE said engaged acres in Operations Center rose about 10% year over year, monthly active digital users reached nearly 440,000 and more than 12,500 JDLink Boost kits have been sold since the Starlink-based connectivity launch.

Capital allocation remained active as well. Norwood said the company returned $635 million to shareholders in the quarter through buybacks and dividends, while maintaining a posture centered on execution, investment and balance-sheet flexibility.

Zacks Rank and Style SignalsDE carries a Zacks Rank #3 (Hold) with a Value Score of D, Growth Score of D, Momentum Score of B and VGM Score of D. A Zacks Rank #3 points to a more neutral near-term earnings revision profile than the stronger #1 or #2 ranks. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Style Scores add a mixed overlay. Momentum stands out as the strongest factor, while the weaker Value, Growth and VGM scores imply a less favorable setup on those measures. Under the Zacks framework, stronger combinations usually come from stocks with a Zacks Rank #1 or #2 and Style Scores of A or B. The rank can also change as estimate revisions adjust after the latest results.

Deere & Co. NYSE: DE delivered a Q2 2026 earnings report that didn’t hide the ball. That transparency makes it easy to understand why DE dropped nearly 5% after the report’s release. The industrial giant posted a double-beat, including a 15% beat on adjusted earnings per share (EPS). But the company’s report showed that the heavy lifting (no pun intended) is being done by its Construction and Forestry business.

Deere & Company Today

DE

Deere & Company

$577.05 +8.41 (+1.48%)

As of 03:59 PM Eastern

This is a fair market value price provided by Massive. Learn more.

52-Week Range$433.00▼

$674.19Dividend Yield1.12%

P/E Ratio32.69

Price Target$639.58

That dovetails nicely with the blockbuster report from NVIDIA Corp. NASDAQ: NVDA that showed data center demand continues to grow and is likely to continue for several years.

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But Deere's report also showed weakness in its Production and Precision Agriculture business. That’s been the golden goose for Deere, and for now it’s a little tarnished.

Plus, while the construction demand is likely to be in play for several quarters, that isn’t likely to do a heavy lift on earnings. In fact, Deere reiterated its full-year earnings guidance.

That suggests that any artificial intelligence (AI) tailwind will simply help earnings from deteriorating, rather than driving further growth.

Farmers Continue to Face HeadwindsIt’s not easy being a farmer under good conditions. But the last few years have been particularly cruel to the industry. Inflation for farmers is about more than fuel. It’s fertilizer, seeds, and the elevated costs for heavy equipment like tractors and combines. All of these are on the rise, mostly due to the conflict with Iran that has brought traffic in the Strait of Hormuz to a standstill.

That's why net sales in the Production and Precision Agriculture business were down 14% in the quarter, and Deere guided to a full-year loss between 5% and 10%. The company also forecasted a lower operating margin between 11% and 13%, down from 15.4% on a year-over-year basis.

For investors who are familiar with Deere’s revenue mix, one item in the report that stood out was the projected 15% net sales decline for the company’s Ag business in South America and softness in Asia and Europe as well.

The company generates about 40% of its revenue outside the United States. It has a particularly strong presence in Latin America, which accounts for over $5.5 billion in annual sales. That's helped it weather softness in the U.S. dollar. But that advantage won’t matter if revenue declines.

The industry got potentially good news from the U.S.-China summit, with the White House estimating that China will buy an additional $17 billion in American farm goods annually. That would extend beyond the country’s initial commitment to buy soybeans.

AI to the Rescue?As challenging as the situation in the company’s core business looks, a diversified business model has its advantages. Deere posted strong gains in its Construction and Forestry business, highlighted by strong data center demand. The company forecasted net sales growth of 20% for the year, with an operating margin between 10% and 12%, above today’s 9%.

Deere also forecasts growth in its Small Ag and Turf business. This includes the company’s specialty, utility, and compact tractors that are used for commercial mowing, golf course maintenance, and utility vehicles. It sometimes gets lumped in with the Precision Ag business, but it would be a mistake for investors not to break apart the two sectors right now.

DE Is Still a Stock to HoldAt 30x earnings, DE is still trading at a slight premium to the S&P 500 and its own historical average. But that valuation has come down from recent readings of about 32x earnings. The same is true of the company’s price-to-sales (P/S) and price-to-book (P/B) ratios.

The bottom line is that Deere has earned that premium because of its pivot into AI, which is likely to pay off in the long term. The company has become part of the larger connectivity story, as evidenced by its inclusion in the SpaceX S-1 filing, where Deere is listed as a Starlink customer.

That alone is enough reason to hold DE and to consider buying the stock on this dip, which is now about 20% in the last three months. But if the company is right about its profit outlook, there could be some choppiness before the payoff. The company’s safe dividend that yields 1.2% won’t be confused for a high-yield dividend, but it is well capitalized and does provide shareholder value while the company’s fortunes reverse.

That’s still the belief of analysts who had a consensus price target of $655.45 on DE heading into earnings. With the post-earnings dip, that would equal more than 20% upside, which would grow if the pullback continues.

For now, momentum is on the bearish side. However, DE is now approaching oversold territory, which could mean that sellers are getting exhausted. That's supported by the lighter-than-average volume following the earnings release.

Should You Invest $1,000 in Deere & Company Right Now?Before you consider Deere & Company, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Deere & Company wasn't on the list.

While Deere & Company currently has a Moderate Buy rating among analysts, top-rated analysts believe these five stocks are better buys.

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Click the link to see MarketBeat's list of seven best retirement stocks and why they should be in your portfolio.

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The stock market simply isn't going to go up all the time. Even during the best of times, the broader market will have an off week or month; you just never know. Volatility isn't fun for anyone, but it's how long-term investors can get a leg up on the market.

You see, when the tide goes out and the broader market declines, blue chip stocks, the best companies on Earth, often go down, too. That's a huge opportunity for investors because there may not be anything wrong with the business itself -- it's just the market doing what the market does.

The recent pullback has created some solid buying opportunities. Here are two blue chip industrial stocks that currently look like two of the best buys you can make.

Image source: Getty Images.

1. Lockheed Martin The world's largest defense manufacturer, Lockheed Martin (LMT 1.52%), isn't a get-rich-quick stock, but it's a blue chip company in every sense of the term. History has shown that the world seldom remains peaceful for long. As unfortunate as that is, it creates a steady demand for the various weapons, vehicles, aircraft, and other technologies Lockheed Martin sells to the U.S. and its military allies.

The ongoing war in the Middle East has depleted arsenals, prompting the U.S. Department of Defense to sign a multi-year agreement to triple and quadruple production of various missiles. Lockheed Martin also produces the F-35 Lightning II fighter jet, the most expensive aircraft program in modern history, and a core revenue driver going forward as it continues to bring new aircraft into service and rack up maintenance and repair services.

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While Lockheed Martin's backlog did shrink slightly from the prior quarter, it remains very healthy at $186 billion after the first quarter of 2026. The Trump Administration has made it clear that the government aims to continue spending heavily on defense over the next few years, so it wouldn't be a surprise to see the backlog grow again in the near future.

Analysts estimate the company will grow its earnings by an average of 18% annually over the next three to five years, which should translate to capital gains and healthy dividend increases. Lockheed Martin stock currently trades well below its 52-week high, which, in this case, has priced shares at an attractive valuation at under 18 times 2026 earnings estimates. Plus, investors get a solid 2.6% dividend yield at the current share price.

2. Deere & Co Farming is the backbone of a growing global population. Deere & Co (DE +1.55%) is an industry titan known primarily for its famous John Deere machinery brand. Today, Deere designs and manufactures machines for farming, forestry, and construction. It also sells complementary products and services, such as software and aftermarket support. Its financial segment, which finances machinery purchases for customers, has also become a tremendous profit center.

Tractors and other machines are expensive purchases, so Deere's business fluctuates with farmers' financial health. Deere's business is in a somewhat in-between place right now. Forestry and construction have been relatively resilient, driven by commercial construction activity. However, the agricultural business has struggled as farmers grapple with lower commodity prices, higher input costs, and higher interest rates, which have reduced income and increased financing costs.

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Deere's top and bottom lines are lower than during the agriculture boom a few years ago. This weakness has weighed on the stock as well. Yet, Deere trades at a price-to-earnings ratio of 29 times 2026 earnings estimates. That might seem high, but this often happens with cyclical stocks, where depressed earnings, the denominator in the P/E ratio, drive the stock's valuation higher.

Often, it's smart to buy cyclical companies during industry downturns, because their stocks tend to recover when business picks up again. There are still many growth opportunities in the artificial intelligence age, including increasingly autonomous and intelligent machinery that can help increase farm output with fewer people. Analysts see Deere growing earnings by an average of more than 15% annually over the next three to five years, making Deere a blue chip stock to buy on its current weakness.

Momentum Dips Amid Changing TrendsThe stock’s short-term and medium-term price trends have shifted into downward trajectories, reflecting a nearly 8.77% decline over the past month.

Despite this immediate technical weakness, the company‘s Benzinga Edge Stock Rankings‘ trend for the long-term remains positive.

Analysts Point To Structural ResilienceWhile short-term momentum fades, institutional sentiment provides a stabilizing counterweight. Freedom Broker reiterated its “Hold” rating for the heavy machinery manufacturer and raised its price target from $570 to $590, projecting an 11.49% upside from the current level.

According to the analyst firm, 2026 marks the cyclical trough for large agricultural equipment. However, Freedom Broker noted that Deere is generating higher structural profitability at this cycle low compared to previous cycles.

This elevated profitability is largely driven by increased demand for construction equipment and ongoing technology monetization.

Macro Headwinds Cloud Agricultural OutlookThe divergence between Deere’s fading momentum and analyst optimism is unfolding against a backdrop of complex macroeconomic pressures. Although Deere reported strong second-quarter earnings—delivering $6.55 per share against estimates of $5.73—management warned of continued weakness.

The company expects the large agriculture markets in the U.S. and Canada to decline by 15% to 20% this year. High interest rates and soaring input costs are actively suppressing farmer sentiment.

Specifically, the conflict in Iran is driving up global fuel and fertilizer prices, placing heavy financial burdens on growers worldwide. Nevertheless, Deere's core fundamentals maintain stability, supported by a strong Benzinga edge growth ranking of 84.33.

DE Stock Gains In 2026DE shares have risen by 13.66% on a year-to-date basis, and it is higher by 8.60% in the six months. Meanwhile, the Nasdaq Composite index was up 13.38% YTD.

Over the last year, DE has advanced by 2.62%; however, it was lower by 8.77% over the month. It has traded in a 52-week range of $433.00 to $674.19, and it was higher by 0.57% in premarket on Monday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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Deere (DE - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.

Over the past month, shares of this agricultural equipment manufacturer have returned -6.2%, compared to the Zacks S&P 500 composite's +5.1% change. During this period, the Zacks Manufacturing - Farm Equipment industry, which Deere falls in, has lost 5.3%. The key question now is: What could be the stock's future direction?

Although media reports or rumors about a significant change in a company's business prospects usually cause its stock to trend and lead to an immediate price change, there are always certain fundamental factors that ultimately drive the buy-and-hold decision.

Revisions to Earnings EstimatesHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.

We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For the current quarter, Deere is expected to post earnings of $5.01 per share, indicating a change of +5.5% from the year-ago quarter. The Zacks Consensus Estimate has changed -2.3% over the last 30 days.

The consensus earnings estimate of $18.05 for the current fiscal year indicates a year-over-year change of -2.4%. This estimate has changed +0.2% over the last 30 days.

For the next fiscal year, the consensus earnings estimate of $22.99 indicates a change of +27.4% from what Deere is expected to report a year ago. Over the past month, the estimate has changed -0.1%.

Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Deere is rated Zacks Rank #3 (Hold).

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS

Revenue Growth ForecastWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.

In the case of Deere, the consensus sales estimate of $10.85 billion for the current quarter points to a year-over-year change of +4.7%. The $41.03 billion and $44.62 billion estimates for the current and next fiscal years indicate changes of +5.4% and +8.8%, respectively.

Last Reported Results and Surprise HistoryDeere reported revenues of $11.78 billion in the last reported quarter, representing a year-over-year change of +5.4%. EPS of $6.55 for the same period compares with $6.64 a year ago.

Compared to the Zacks Consensus Estimate of $11.44 billion, the reported revenues represent a surprise of +2.98%. The EPS surprise was +12.74%.

Over the last four quarters, Deere surpassed consensus EPS estimates three times. The company topped consensus revenue estimates each time over this period.

ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.

Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.

As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

Deere is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Deere. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.

On June 02, 2026, we present a detailed DCF analysis for Deere & Co DE , a company that has shown a year-to-date price increase of 16.9% and a 1-year price increase of 8.6%. Despite recent fluctuations, the stock remains a topic of interest for investors.

DCF Earnings-based intrinsic value of $566.57 vs current price of $542.43 (margin of safety: 1.7%) DCF FCF-based intrinsic value of $160.30 vs current price (second opinion indicating significant overvaluation) GF Score™ of 91/100, indicating high reliability of the DCF inputs What Is DE Worth? DCF Earnings-Based Model The DCF earnings-based model for Deere & Co utilizes a two-stage approach to estimate its intrinsic value. The first stage considers a high growth phase lasting 10 years, where we expect earnings per share (EPS) to grow at a rate of 20.4% annually. The second stage reflects a terminal growth phase where growth slows to 4% for the subsequent 10 years. The discount rate applied to both stages is 11%, derived from the risk-free rate and equity risk premium.

Parameter Value Current EPS (TTM, excl. non-recurring) $17.65 10-Year Growth Rate 20.4% 10-Year Treasury Rate 4.43% Discount Rate (ceil(Treasury) + 6%) 11% Terminal Growth Rate 4% The calculation summary for the two-stage model is as follows:

Stage Description Value Growth Stage (Years 1-10) EPS growing at 20.4%, discounted at 11% $283.59 Terminal Stage (Years 11-20) 4% terminal growth, discounted at 11% $282.98 Intrinsic Value Growth + Terminal $566.57 When comparing the current price of $542.43 to the intrinsic value of $551.56, we find that Deere & Co is fairly valued with a margin of safety of 1.7%. It is important to note that GuruFocus uses EPS excluding non-recurring items, as research indicates that stock prices correlate more closely with earnings than with free cash flow.

For further details, visit the DE DCF Calculator.

What Does the Free Cash Flow DCF Say? In contrast to the earnings-based model, the free cash flow (FCF) DCF model yields an intrinsic value of $160.30. This significant disparity when compared to the earnings-based valuation suggests that the FCF model indicates that Deere & Co is significantly overvalued, with a margin of safety of -238.4%. This divergence highlights the importance of considering multiple valuation perspectives when assessing a stock's worth.

How Does GF Value™ Compare to the DCF Models? The GF Value™ for Deere & Co is calculated at $379.87, providing a third perspective on the company's valuation. GF Value™ is GuruFocus' proprietary measure, derived from historical trading multiples, past business growth, and future performance estimates. In this case, all three models present differing views on valuation, with the earnings-based model suggesting fair value, the FCF model indicating significant overvaluation, and the GF Value™ suggesting the stock is overvalued. For more information, visit the GF Value™ page.

What Does DE's GF Score™ Tell Us? The GF Score™ for Deere & Co is an impressive 91/100, indicating strong potential for long-term returns based on five key aspects: Financial Strength, Profitability, Growth, Valuation, and Momentum. Stocks with higher GF Score™ values have historically generated higher long-term returns, making this score a valuable indicator for investors.

Metric Rating GF Score™ 91/100 Financial Strength 4/10 Profitability 9/10 Growth 10/10 Valuation 5/10 Momentum 10/10 With a predictability rank of 3/5 stars, this indicates that the DCF model is reasonably reliable for Deere & Co. For more insights, visit the DE stock page.

Key Assumptions and Limitations It is crucial to recognize that DCF models are highly sensitive to growth rate and discount rate assumptions. Additionally, stocks with low predictability ratings tend to produce less reliable DCF estimates. The terminal growth rate of 4% is a simplifying assumption that may not reflect actual future conditions.

What This Means for Investors In synthesizing the findings from the DCF earnings-based model, the DCF FCF model, and the GF Value™, we conclude that Deere & Co is currently fairly valued according to the earnings-based model, significantly overvalued according to the FCF model, and overvalued based on the GF Value™. This mixed consensus suggests a cautious approach for investors considering this stock.

For the full DCF analysis, visit the DE DCF Calculator. You can also explore the GF Value™ page, or use the GuruFocus Stock Screener to find undervalued predictable companies.

Frequently Asked Questions What is DE's intrinsic value based on DCF?

earnings-based $551.56, FCF-based $160.30

Is DE overvalued or undervalued?

Based on the DCF earnings model, DE is fairly valued; however, the FCF model indicates it is significantly overvalued, and GF Value™ suggests it is overvalued as well.

How reliable is the DCF model for DE?

With a predictability rank of 3/5 stars, the DCF model is reasonably reliable for DE.

This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].

Deere (DE - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.

Over the past month, shares of this agricultural equipment manufacturer have returned -2%, compared to the Zacks S&P 500 composite's no change. During this period, the Zacks Manufacturing - Farm Equipment industry, which Deere falls in, has remained unchanged. The key question now is: What could be the stock's future direction?

While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.

Revisions to Earnings EstimatesRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.

We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For the current quarter, Deere is expected to post earnings of $4.82 per share, indicating a change of +1.5% from the year-ago quarter. The Zacks Consensus Estimate has changed -6% over the last 30 days.

For the current fiscal year, the consensus earnings estimate of $18.1 points to a change of -2.2% from the prior year. Over the last 30 days, this estimate has changed +0.5%.

For the next fiscal year, the consensus earnings estimate of $22.83 indicates a change of +26.1% from what Deere is expected to report a year ago. Over the past month, the estimate has changed -0.8%.

Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Deere is rated Zacks Rank #3 (Hold).

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS

Revenue Growth ForecastEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.

In the case of Deere, the consensus sales estimate of $10.78 billion for the current quarter points to a year-over-year change of +4.1%. The $41.13 billion and $44.69 billion estimates for the current and next fiscal years indicate changes of +5.7% and +8.7%, respectively.

Last Reported Results and Surprise HistoryDeere reported revenues of $11.78 billion in the last reported quarter, representing a year-over-year change of +5.4%. EPS of $6.55 for the same period compares with $6.64 a year ago.

Compared to the Zacks Consensus Estimate of $11.44 billion, the reported revenues represent a surprise of +2.98%. The EPS surprise was +12.74%.

Over the last four quarters, Deere surpassed consensus EPS estimates three times. The company topped consensus revenue estimates each time over this period.

ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.

While comparing the current values of a company's valuation multiples, such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), with its own historical values helps determine whether its stock is fairly valued, overvalued, or undervalued, comparing the company relative to its peers on these parameters gives a good sense of the reasonability of the stock's price.

As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

Deere is graded D on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

ConclusionThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Deere. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.

The market sold off Oracle Corporation's $70 billion CapEx guide for FY27 (plus $20B-$25B of prepayments), but my real concern is whether Oracle can turn that spend into revenue on time. I can live with weak free cash flow in a buildout, but I need clean signs that ORCL's prepayments, shipments, and revenue timing are holding together. I see increasing risks of broader datacenter delays in the U.S. If this risk affects Oracle (a big if), it may delay its RPO conversion targets.

"It's not the print, it's the spending that continues to concern investors," says Daniel Newman of Futurum when discussing Oracle's (ORCL) earnings. The cloud company posted an earnings beat and massive backlog totaling more than $630 billion but is doing so through raising more debt funding.

By PYMNTS  |  June 11, 2026

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Oracle has discovered a vulnerability in some of its PeopleSoft software that is remotely exploitable without authentication and can result in remote code execution if exploited by hackers, the company said in a Wednesday (June 10) security alert.

The vulnerability (CVE-2026-35273) is in Oracle PeopleSoft PeopleTools and may affect Oracle PeopleSoft Enterprise Applications, according to the security alert.

“We consider implementation of the recommended mitigations to be a high-priority risk reduction measure and strongly recommend immediate action to address the identified exposure,” the security alert said. “Oracle always recommends that customers remain on actively-supported versions and apply all Critical Patch Updates, Critical Security Patch Updates and Security Alerts without delay.”

Mandiant and Google Threat Intelligence Group (GTIG) addressed the exploit in a Thursday (June 11) blog post, saying they identified an active compromise and extortion campaign targeting the Oracle PeopleSoft application infrastructure.

The companies said they notified more than 100 global organizations that could be vulnerable to this exploit and found that most were in the United States and 68% were within the higher education sector.

They also said they found data leaks of stolen organization data published on a hacking group’s site on Tuesday (June 9).

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Mandiant and GTIG also shared in their blog post a post from the hacking group’s website in which the group claimed to have stolen billing and payment records, credit card and payment details, student finance data and other sensitive data.

TechCrunch reported Thursday that the hacking group claimed to have breached more than 100 organizations that use PeopleSoft servers.

These reports follow several other recent data breaches and other cyberattacks.

Toymaker Hasbro reported in April that it had uncovered a breach, had taken some of its systems offline, and believed it could take weeks to resolve the cyberattack.

It was reported in February that 12.4 million records of customer data were stolen from car shopping site CarGurus and posted by a hacking group.

In October 2025, it was reported that a hacking group claimed to have stolen 1 billion records from cloud databases hosted by Salesforce and was attempting to extort Salesforce and the companies to which that data belonged.

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