DE vs AGCO: Why 30% Equipment Returns Produce 6% ROIC

Published: February 10, 2026 Data Currency: DE data from 10-K (annual SEC filing) filed December 18, 2025 (FY ending November 2, 2025). AGCO FY2025 from 10-K (annual SEC filing, filed February 2026); supplemented by 8-K earnings release (February 5, 2026). CNH data from 10-Q (Q3 2025). TITN from 10-Q (Q3 FY2026, ended October 31, 2025). ROIC computed from MetricDuck's standardized NOPAT/invested capital methodology using XBRL (machine-readable financial data) from SEC filings. Last reviewed: February 15, 2026 by MetricDuck Research.

Standard financial screening shows Deere and AGCO earning similar 5-6% returns on capital. Both numbers are wrong — and they're wrong in different directions. Deere's equipment segments earn 30% on assets, but a $70 billion finance arm drags consolidated ROIC below the company's own cost of debt. AGCO's 5.3% hides a company that just generated record free cash flow and delivered the first growth guidance from any major manufacturer in three years.

Large agricultural equipment volumes have declined 35-45% from their 2023 peak — the worst downturn since 2016. U.S. net farm income is at its lowest inflation-adjusted level since 2010. Tariffs are raising equipment costs while crop prices stay flat, creating a cost-price squeeze that's forcing farmers to defer purchases — but not cancel them. Equipment fleets are aging, maintenance costs are rising, and the replacement wave is building pressure.

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Why Farm Equipment ROIC Matters Now

ROIC — return on invested capital — measures how efficiently a company converts its capital base into profit. For farm equipment, this metric is both essential and uniquely broken.

Cyclical troughs reveal structural advantages. Companies earning above their cost of capital at the bottom of a 35-45% volume decline have competitive moats that compound when the cycle recovers. At mid-cycle, everyone looks profitable. At the trough, the gap between Deere's 30% equipment returns and AGCO's 6.7% is the difference between pricing power and survival.

Standard ROIC fails for financial-industrial hybrids. Deere's Financial Services arm holds $70 billion in assets and $57 billion in debt. Standard ROIC divides operating profit by total capital — burying world-class equipment returns under a massive lending portfolio. This article shows how to decompose the hybrid to see both the equipment excellence and the financing risk.

Tariff asymmetry is the biggest variable nobody's quantifying. Deere faces approximately $1.2 billion in tariff costs for FY2026. AGCO faces $65 million — roughly 18x less — because its revenue is 65% European. In a sector where margins are already compressed, this gap determines who has room to reinvest in precision agriculture and who's absorbing costs.

One company is guiding to growth. AGCO's 2026 guidance ($10.4-$10.7 billion revenue) is the first growth outlook from any major farm equipment company in three years. Spring 2026 planting orders will confirm or deny the "2025 was the trough" thesis.

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The Valuation Disconnect

Deere's stock rallied approximately 31% in calendar 2025 while EPS fell 29%. AGCO surged 20% in seven days after its February 2026 earnings beat. The market is pricing in recovery — but the filings haven't caught up yet.

MetricDuck computes valuation multiples from XBRL financial data and market prices at each filing snapshot:

Metric	DE	AGCO
Price (at filing snapshot)	$461.63	$107.07
P/E (FY or TTM)	24.9x	26.1x
Price / Book	5.1x	1.8x
EV / EBITDA (TTM)	21.1x	29.8x
EV / FCF (TTM)	28.5x	13.8x
Book Value / Share	$95.97	$60.18

Pipeline snapshot dates: DE November 2, 2025; AGCO September 30, 2025. Current prices (February 2026) are materially higher: DE approximately $600, AGCO approximately $138 after the Q4 earnings surge. CNH and TITN valuation data omitted — CNH's FPI transition makes XBRL multiples unreliable; TITN's negative EBITDA and trailing losses make most ratios meaningless. TITN trades at 0.6x book value.

Deere trades at 25x trailing earnings while its consolidated ROIC (5.9%) barely exceeds its cost of debt (5.3%). The stock is trading above the average analyst price target of approximately $524 — investors are pricing in equipment excellence (30% segment returns) while absorbing the Financial Services drag. At the filing snapshot price, Deere carries a 5.1x price-to-book premium. At current prices around $600, that premium expands further.

AGCO trades at 1.8x book value versus Deere's 5.1x — a 2.8x book value premium for Deere's moat. But AGCO's EV/FCF of 13.8x (based on the record $740 million FCF year) is half of Deere's 28.5x. The market prices AGCO's balance sheet stress (covenant amendment, PTx Trimble write-down) but may underprice the recovery signal. Forward P/E estimates around 18x versus Deere's approximately 23x reflect faster expected earnings growth.

TITN trades below book value at 0.6x P/B. When a dealer trades at 60 cents on the dollar with three of four segments at a loss, it's either a value trap or a cycle-bottom indicator. The 199-day cash conversion cycle says inventory must clear before any recovery accrues to shareholders.

The valuation inversion tells the cycle story: The quality company (Deere) is the most expensive. The recovery play (AGCO) is moderately priced. The distressed dealer (TITN) is priced for possible failure. This is textbook trough pricing — but it means Deere holders pay a premium for the equipment moat while absorbing FinServ tail risk at the same time.

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The ROIC Ranking — Why Every Number Is Wrong

We computed ROIC — net operating profit after tax divided by total capital — for four publicly traded agricultural equipment companies using XBRL financial data:

Company	Ticker	ROIC	Cost of Debt	Spread	Revenue	Period
CNH Industrial	CNH	31.0%*	—	—	$17.8B TTM	Q3'25
AGCO Corp	AGCO	5.3%	5.4%	-0.1 pp	$10.1B	Q.MED8
Deere & Company	DE	5.9%	5.3%	+0.6 pp	$45.7B	FY'25
Titan Machinery	TITN	2.1%	11.2%	-9.1 pp	$2.5B TTM	Q3 FY'26

*All metrics computed by MetricDuck from XBRL filings (filing_metrics pipeline). TTM = trailing twelve months. Q.MED8 = 8-quarter median (smooths cyclical noise). Cost of debt = interest expense / average total debt. Spread = ROIC minus cost of debt; negative spread = value destruction. Revenue rounded. CNH ROIC unreliable — see below.

These four numbers represent four different kinds of failure in standard ROIC screening.

CNH's 31% is a data artifact. CNH transitioned from Foreign Private Issuer (FPI — companies incorporated outside the U.S. that file a different set of SEC reports) to domestic filer in 2025. The XBRL element mapping failed — total debt registers as $0, when the company actually carries approximately $25 billion. With $0 debt, the ROIC denominator collapses and the ratio inflates. We exclude CNH from primary comparisons. See CNH and TITN below for what the filings actually reveal.

Deere's 5.9% buries the real story in both directions. It hides world-class equipment economics (30% segment returns) behind a $70 billion Financial Services balance sheet. It also hides that consolidated ROIC fell below Deere's cost of debt in Q4 — meaning the company destroyed value on a total capital basis in its most recent quarter.

AGCO's 5.3% is the cleanest number because AGCO's financial services (a JV with Rabobank) is not consolidated. But "clean" doesn't mean "simple" — the FY2025 story has two halves, explored in detail below.

TITN's 2.1% is accurate and devastating. No financial services distortion, no filing transition issues — just a dealer trying to survive with three of four segments at a loss.

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The Equipment Case: Deere's Operational Superiority Is Real

Before examining the risks, the bull case deserves rigorous evidence. Deere's equipment operations are genuinely exceptional, and this isn't accounting.

Segment Decomposition

Deere's 10-K (FY2025) breaks operating income across four segments:

Segment	Revenue	Operating Income	Segment Assets	Return on Assets
Production & Precision Ag	$17,311M	$2,671M	$8,787M	30.4%
Small Agriculture & Turf	$10,224M	$1,207M	$3,987M	30.3%
Construction & Forestry	$11,382M	$1,028M	$7,792M	13.2%
Financial Services	$6,289M	$1,114M	$70,021M	1.6%
Equipment Total	$38,917M	$4,906M	$20,566M	23.8%

Production & Precision Agriculture and Small Agriculture & Turf both earn 30% return on segment assets — at the trough, with large ag volumes down 35-45%. Construction & Forestry earns 13.2%, reflecting higher competitive pressure. Financial Services earns 1.6% on $70 billion — normal for spread lending, but its asset base overwhelms the consolidated calculation.

The 23.8% combined equipment return is a pre-tax figure using segment assets as allocated in the 10-K footnote, not ROIC. But it establishes that the equipment operations produce returns far above any reasonable cost of capital, even at a cyclical trough.

The Equipment Comparison: DE vs AGCO

With Financial Services stripped from Deere, the head-to-head becomes meaningful:

Metric	DE Equipment	AGCO	DE Advantage
Operating Income	$4,906M	~$778M	6.3x
Operating Assets	$20,566M	$11,583M	1.8x
Return on Operating Assets	23.8%	6.7%	3.6x
Operating Margin (8Q Median)	15.3%	5.3%	2.9x
NOPAT Margin (FY/TTM)	10.5%	5.3%	2.0x

Deere earns 3.6x the return on equipment assets. The advantage persists through the 8-quarter median (2.9x operating margin gap), confirming it's structural rather than a single-quarter anomaly.

All metrics computed by MetricDuck from XBRL filings. AGCO's pipeline-computed adjusted operating margin (Q = 5.8%, TTM = 1.0%) reflects the Q1-Q3 drag. The FY2025 8-K-reported adjusted margin of 7.7% includes Q4's inflection — demonstrating how the quarterly pipeline data and annual 8-K data tell complementary stories.

Cash Conversion Cycle: What ROIC Can't Capture

For financial-industrial hybrids, ROIC fails to capture operational efficiency because Financial Services debt dominates the denominator. Cash conversion cycle — how fast a company turns inventory into cash — is not distorted by financing activities:

Company	CCC (TTM)	Type
Deere	46 days	Manufacturer
AGCO	99 days	Manufacturer
CNH Industrial	157 days*	Manufacturer
Titan Machinery	199 days	Dealer

*CCC = DSO + DIO - DPO, computed by MetricDuck XBRL pipeline. CNH figure equals DIO only (DSO and DPO register as zero due to FPI transition artifact).

Deere converts sales to cash in 46 days — 2x faster than AGCO, 4x faster than TITN. This reflects Deere's negative working capital (-$837 million — it operates on supplier float, collecting from customers before paying suppliers), plus superior inventory management.

The manufacturer-vs-dealer gap is also revealing: TITN's 199-day cycle reflects the structural burden of carrying physical inventory on dealer lots. Dealers absorb the working capital cost that manufacturers push downstream.

Earnings Quality Confirms the Returns Are Real

Deere's operating cash flow is 1.48x net income (OCF/NI ratio). For context, the industrial sector median is approximately 1.2x — Deere's ratio indicates equipment earnings convert to cash at an above-average rate. The equipment returns aren't accounting artifacts; they convert to cash. This is a contrarian positive amid the bearish findings that follow.

Deere's equipment operations are world-class — the question is everything else on the balance sheet.

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The Balance Sheet Case: What the Bull Case Misses

The equipment case is compelling. Here's what it doesn't tell you.

ROIC Below Cost of Debt

In Q4 FY2025, Deere's consolidated ROIC fell to 4.86%. Its cost of debt: 5.26%. The spread: -0.40 percentage points. Deere earned less on its total invested capital than it paid to borrow.

This is a consolidated figure — the equipment segments still earn 30% on their assets. The value destruction is FinServ-driven: a $70 billion finance arm whose cost of capital exceeds its return at current rates. But FinServ is part of the company, uses real capital, and creates real risks. You cannot strip it from the stock price.

The full-year ROIC (5.9%) is slightly above cost of debt. The Q4 figure may reflect seasonal weakness. But the trend is unambiguous: ROIC has declined from an 8-quarter median of 7.2% to the current 4.86%, falling at -4.9 percentage points per quarter. This is not noise.

The Leverage Illusion: ROE vs ROIC

Deere's return on equity is 20.6%. That looks healthy. But ROIC is 5.9%.

The -14.7 percentage point spread reveals what powers the equity return: leverage. Deere has accumulated $36.4 billion in treasury stock through decades of buybacks, compressing its equity base. A smaller equity denominator makes ROE look strong even when returns on total capital are falling. ROE is the metric that flatters; ROIC is the one that tells the truth.

Interest Coverage Is Collapsing

Period	Interest Coverage	YoY Change
FY2024	2.70x	-48.9%
Q2 FY2025	2.94x
Q3 FY2025	1.97x
Q4 FY2025	1.77x
FY2025	1.90x	-29.7%

Interest coverage fell from 2.70x to 1.90x in one year, and the quarterly trend is -1.3 per quarter. Below 2.0x is a yellow flag for any industrial company. Deere's $3.17 billion in interest expense — overwhelmingly from Financial Services borrowings — is approaching its $6.02 billion EBIT.

The company has $8.55 billion in debt maturing within 12 months, requiring refinancing in an elevated rate environment.

Capital Returns Signal Management's Private Assessment

What management does with capital allocation is more informative than what they say on earnings calls.

MetricDuck's pipeline quantifies the shift precisely: Deere's capital return ratio (capital returned / operating earnings) was 27.3% at the 8-quarter median. In Q4 FY2025, it fell to 12.6%. Buyback payout ratio collapsed from an 8-quarter median of 18.7% to 0.06% — effectively zero. Meanwhile, dividend payout ratio rose from a Q.MED8 of 28.3% to 41.1% as earnings fell while dividends held.

The $36.4 billion in cumulative treasury stock shows management has historically been aggressive returning capital. The sudden halt signals capital preservation mode — management sees balance sheet risks that warrant hoarding cash rather than buying back stock.

Counterintuitively, AGCO's trailing capital return ratio (51.2%) actually exceeded Deere's (47.5%) — AGCO executed $300 million in buybacks despite the covenant amendment. The 10-K resolved this: AGCO's record $740 million free cash flow funded both $457.4 million in dividends and full repayment of the $350 million revolver drawdown, while ending the year with zero outstanding borrowings on the credit facility. This was confident trough-timing backed by real cash generation — not over-distribution during stress.

CFO Departure Compounds the Signal

Deere's CFO Joshua Jepsen resigned January 22, 2026 — effective February 19, the same day as Q1 FY2026 earnings. He departed for Honeywell Aerospace's upcoming spin-off. Deere's 8-K states the departure "does not relate to any financial or accounting matters." Ryan Campbell, previously president of Construction & Forestry and Deere's prior CFO from 2019-2022, returns as interim CFO.

When a CFO departs during an active earnings cycle while interest coverage is below 2x and $8.55 billion in debt matures within 12 months, the timing is notable — regardless of the stated reason. Combined with the buyback halt, this is the second behavioral signal from Deere's C-suite in one quarter.

Financial Services Credit Quality Is Deteriorating

Deere's 10-K discloses the specific mechanisms:

• Credit commitments: $13.3 billion to dealers and $34.2 billion to retail customers — $47.5 billion total
• Non-performing receivables: 1.23%, up from 1.01%
• Modified loans: Doubled from $94 million to $186 million
• Write-offs: $312 million, up from $281 million
• Dealer incentive accrual: $828 million — quantifying the "greater reliance on sales incentives" management describes in the 10-K

None of these individual metrics are alarming — 1.23% non-performing is not a crisis. But the direction is uniform: every credit quality metric is deteriorating simultaneously, at a point in the cycle where farm income is still declining. The question is whether these are cyclical fluctuations that reverse with recovery or early indicators of larger credit stress in the $47.5 billion portfolio.

Every credit metric is moving in the wrong direction simultaneously — from interest coverage to non-performing loans to write-offs.

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The Precision Ag Moat Under Threat

The 30% equipment returns at a trough prove that Deere's precision agriculture platform creates real pricing power. The question is whether that moat is durable.

Evidence the Moat Is Real

Deere's See & Spray uses computer vision to identify individual weeds across 5 million acres, reducing herbicide application by 50%. Deere offers a guaranteed ROI program for the technology — the company commits to specific per-acre savings, reflecting confidence in the performance data. Autonomous tillage equipment runs 24/7 without an operator. PTx Trimble's OutRun autonomous grain cart won the 2025 Davidson Prize for agricultural innovation. These are deployed systems generating measurable farm economics — farmers adopt precision technology when it reduces input costs per acre, and once a grower sees 50% herbicide savings across thousands of acres, the adoption is permanent.

Deere maintained $2.3 billion in R&D spending through the downturn — protecting the intellectual property pipeline even as it cut physical investment (capex/depreciation ratio of 0.61x from the MetricDuck pipeline). The platform encompasses computer vision, autonomous equipment, connected fleet management, and proprietary positioning systems. These are integrated into the equipment, creating switching costs.

The capex comparison with AGCO is revealing: Deere's FY capex/depreciation ratio of 0.61x means it is spending 39% less on physical investment than it depreciates — harvesting its installed base. AGCO's ratio is 1.10x — investing above depreciation at the trough, consistent with the PTx Trimble integration build-out. Deere bets on the existing moat holding. AGCO bets on building a new one. PTx Trimble carries $71.1 million per year in acquired intangible amortization (declining to $50.6 million by 2030) — the ongoing cost of having bought rather than built a precision ag platform. If PTx Trimble delivers the targeted $2 billion+ in precision ag revenue by 2028, this amortization is a rounding error. If it doesn't, it's a permanent drag on reported earnings.

The financial evidence is definitive: 30% segment returns at the trough means Deere can sustain premium pricing when competitors cannot. AGCO's North American margins went negative (-10.5%). Deere's equipment margins compressed but remained deeply profitable.

Evidence the Moat Is Threatened

The FTC antitrust lawsuit is the most underappreciated risk in the filing. The FTC and five state attorneys general allege monopolization and unfair competition in repair services — specifically, restrictions on diagnostic tools and repair information that force customers into Deere's dealer network.

Deere's motion to dismiss was denied. The 10-K notes "preliminary discussions" about resolution. Deere accrued $95 million in Q4 for legal expenses related to the matter.

This lawsuit directly targets the dealer channel lock-in that sustains pricing power. If third-party repair access opens up, independent service providers erode one of Deere's key switching costs. The repair moat and the precision ag moat are intertwined — customers locked into Deere's diagnostic ecosystem have higher total switching costs.

SaaS revenue is not yet material. Deere's 10-K states that revenue from SaaS products "did not represent a significant percentage of our revenues." The recurring revenue narrative — software subscriptions insulating revenue from equipment cycles — is aspirational. The moat today is pricing power on hardware, not recurring SaaS margins.

The moat is real, but the FTC lawsuit targets the specific mechanisms — dealer lock-in and diagnostic tool restrictions — that sustain it.

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AGCO: From Covenant Amendment to Record Free Cash Flow

AGCO's story changed between Q3 and Q4 2025 — the filing intelligence timeline captures the shift. In Q3, the picture was bleak: 82% of net income was a one-time gain, North American margins were deeply negative, and the company had amended its credit covenants. By Q4, AGCO delivered adjusted operating margins of 10.1%, record free cash flow of $740 million (188% conversion), and 2026 guidance showing the first revenue growth in three years. The structural concerns didn't disappear — but the trajectory shifted.

FY2025: The Numbers Behind the Headlines

AGCO's FY2025 8-K (filed February 5, 2026) reports:

Metric	FY2025	Prior Year	Change
Net Sales	$10.1B	$11.7B	-13.5%
Operating Income (GAAP)	$595.7M	-$122.1M	Swing to profit
Adjusted Operating Margin	7.7%	—	~2x last cycle's bottom
Q4 Adjusted Operating Margin	10.1%	-9.3%	+1,940 bps
Free Cash Flow	$740M	—	Record (188% conversion)
Q4 EPS	$1.30	-$3.42	Swing to profit

The full-year adjusted operating margin of 7.7% is the key metric. At the bottom of the 2015-2016 cycle, AGCO's margin bottomed around 4%. Nearly doubling that figure during a worse downturn (NA tractors -10%, combines -27%) suggests structural improvement from the ongoing restructuring ($82.2 million in FY2025 expenses, expected to yield $125 million in annual savings).

Management also reported the company's largest-ever market share gains in North American large agriculture — gaining share while underproducing to clear dealer inventory.

Fleet Age and the Replacement Thesis

CEO Eric Hansotia stated in the FY2025 earnings release: "2025 was the bottom of the trough, and the fleets in our major markets are at the peak of their age." The 10-K does not independently quantify fleet age, but the balance sheet provides indirect evidence: finished goods inventory fell 10% ($1,070.6 million from $1,187.9 million — dealer channel clearing) while repair and replacement parts inventory rose 9% ($824.6 million from $754.6 million — stocking for aging fleet maintenance). Both signals are consistent with this claim.

The revenue disaggregation data from the 10-K adds further corroboration. While tractor revenue fell from $8,711 million (FY2023) to $6,693 million (FY2025) — a 23% peak-to-current decline — replacement parts revenue grew from $1,816 million to $1,873 million (+3.2%). Parts rose from 12.6% to 18.6% of total revenue. During a severe equipment downturn, the parts business grew. This is the farm equipment "recurring revenue" — aging fleets need more maintenance regardless of new equipment purchases.

Revenue Stream	FY2025	FY2024	FY2023	Change (Peak to Current)
Tractors	$6,693M	$7,059M	$8,711M	-23.2%
Replacement Parts	$1,873M	$1,828M	$1,816M	+3.2%
Parts as % of Total	18.6%	15.7%	12.6%	+600 bps

Source: AGCO FY2025 10-K revenue disaggregation (XBRL), extracted by MetricDuck.

Combined with AGCO's deliberate underproduction — approximately 10% below end-market demand in H1 2026 — dealer inventories are clearing. This sets up the conditions for a production ramp when orders return.

Farmer economics support delayed — not canceled — demand. From the filing's market outlook: crop producers are operating at approximately breakeven, with government program payments playing a larger role in farm income. Livestock operations remain positive. USDA projects net farm income at $153.4 billion for 2026 (down only 0.7%), while net cash farm income actually increases 3%. Farmers aren't going bankrupt — they're deferring purchases because margins are thin. But aging equipment, rising maintenance costs, and government support create the conditions for the replacement cycle to compress into a surge when crop economics stabilize.

Q3 Earnings Quality: The TAFE Gain in Context

AGCO sold its stake in India's TAFE (Tractors and Farm Equipment Limited) for $260 million, recognizing a pre-tax gain of $251.9 million ($230 million after tax). In Q3 alone, that gain was 82% of reported net income — a significant earnings quality flag for that quarter. TAFE also received the Massey Ferguson brand rights in India, Nepal, and Bhutan — a permanent revenue sacrifice for a one-time cash infusion.

With Q4 context, the full-year picture is less distorted: Q4 net income was $161.6 million on operational results alone, demonstrating the underlying business generates real earnings independent of the TAFE transaction.

North America: Still Negative, But Gaining Share

AGCO's FY2025 regional breakdown reveals why geographic diversification matters at a trough:

• Europe/Middle East: $6.7 billion FY revenue, Q4 operating margin of 16.8% — this segment alone generated $1,007 million in operating income. Europe isn't just "carrying the company" — it's a profit engine that makes AGCO viable as a standalone equipment business even if North America takes another year to recover.
• North America: -$112 million full-year operating loss on $1.8 billion revenue (-27.5% decline). Q4 NA net sales fell 8.5% (excluding currency). Operating margins remained negative — but Q4 showed sequential inflection despite the year-over-year decline.
• South America: $51 million operating income despite 9.3% Q4 sales decline — still profitable, unlike North America.

The 8-K introduces a counterpoint the Q3 filing couldn't: AGCO gained its largest-ever market share in North American large agriculture. Losing money while gaining share is a deliberate strategy — AGCO is underproducing (approximately 10% below end-market demand in H1 2026) to clear dealer inventory while positioning for recovery.

The Covenant Amendment and Balance Sheet Resolution

In May 2025, AGCO "amended the Credit Facility with respect to the net leverage ratio financial covenant requirements for the remainder of 2025 and in the event of a future material acquisition."

Companies don't amend covenants for fun. At Q3, net debt/EBITDA stood at 6.7x TTM (trailing twelve months) and AGCO had drawn $350 million on its revolving credit facility. MetricDuck's filing intelligence pipeline extracted the underlying working capital pressure: inventory rose from $2,731 million to $3,081 million (+12.8%), working capital ballooned from $1,312 million to $2,094 million (+60%), and capex was cut from $279 million to $159 million (-43%) — all while the pipeline classified AGCO's margin trend as "improving" on lower manufacturing costs. The tension between deteriorating working capital and improving margins tells the covenant story: AGCO was building inventory deliberately while cutting costs, burning cash before the recovery.

The 10-K resolved the uncertainty. By year-end, AGCO had no outstanding borrowings under the revolving credit facility and had the ability to borrow $1,250.0 million. The $350 million Q3 drawdown was fully repaid. An additional uncommitted €200 million (~$234.6 million) facility was also undrawn. Short-term borrowings fell 38% to $56.1 million from $90.4 million.

The balance sheet improved materially: cash rose 41% to $862 million (from $613 million), stockholders' equity increased 16% to $4.3 billion (from $3.7 billion), and inventory held flat at $2.7 billion despite the 13.5% revenue decline — disciplined inventory management, not the bloat the Q3 pipeline data suggested.

AGCO's debt maturity schedule from the 10-K shows no near-term refinancing pressure: 2027 ($397.2 million at 5.45%), 2028 ($738.6 million including the €600 million Senior Notes), 2029 ($293.0 million EIB loan), 2030 ($199.3 million EIB loan), and 2034+ ($700 million at 5.80%). Total long-term debt: $2,323.1 million net. Contrast this with Deere's $8.55 billion maturing within 12 months.

FY2025 interest paid was $121.9 million. Against segment operating income of $595.7 million, that's approximately 4.9x coverage — a complete reversal from the distorted -1.31x at Q3, which was driven by the $351 million PTx Trimble goodwill impairment (a FY2024 charge) pulling GAAP EBIT below interest expense. The 10-K confirms AGCO can comfortably service its debt from operations. The European Investment Bank loans carry additional covenants (net leverage ratio and interest coverage ratio), and AGCO was in compliance at year-end.

PTx Trimble: The Impairment Is Behind Them

AGCO acquired PTx Trimble for approximately $2 billion in April 2024 to compete with Deere's precision ag platform. Less than 12 months later, AGCO recorded a $351 million goodwill impairment on the PTx Trimble North America reporting unit — writing down 17% of the deal value. That impairment was recorded at the October 1, 2024 assessment, not FY2025.

The FY2025 annual assessment told a different story: goodwill impairment analyses conducted as of October 1, 2025 indicated that no impairment existed and no reduction in the carrying amount of goodwill was required. PTx Trimble goodwill was assigned to four reporting units (one per geographic segment) — only North America was impaired. Remaining goodwill across all reporting units: $1,898.8 million. Accumulated impairment: $708.2 million.

The contrast with Deere is instructive. Deere built its precision ag platform organically over 20+ years. The technology is integrated into the equipment, creating switching costs, and the R&D shows up as operating expense — not goodwill sitting on the balance sheet awaiting impairment. AGCO's $2 billion acquisition created $2 billion in goodwill that has been partially written down.

The intangible amortization schedule from the 10-K quantifies the ongoing drag: $71.1 million in FY2025, declining to $67.8 million (2026), $61.1 million (2027), $54.5 million (2028), $51.7 million (2029), and $50.6 million (2030). The declining schedule means the acquisition's impact on reported earnings shrinks every year. The question remains whether PTx Trimble can deliver the targeted $2 billion+ in precision ag revenue by 2028 — the payback that would justify the acquisition price.

AGCO also carries $214.3 million in residual value guarantees on equipment and a $70.3 million guarantee on Argentine obligations with non-credit risk triggers (currency, regulatory changes).

2026 Guidance: First Growth in Three Years

The 10-K's MD&A provides more measured language than the 8-K earnings release: Global industry demand for farm equipment, driven by farm income, is expected to be relatively flat during 2026 in most major markets compared to 2025. Net sales are expected to modestly increase in 2026, resulting from positive pricing, favorable currency translation and sales mix — meaning the growth is pricing and FX, not volume recovery. The distinction matters: "relatively flat" demand with "modestly" increasing sales is honest qualification that tempers the bullish 8-K narrative.

AGCO's 2026 guidance from the 8-K:

• Revenue: $10.4 billion to $10.7 billion (3-7% growth)
• Adjusted EPS: $5.50 to $6.00
• Operating margin: 7.5% to 8.0%
• Tariff headwind: Approximately $65 million

The tariff figure is particularly noteworthy relative to Deere's estimated $1.2 billion exposure. The 10-K's risk factors explain the structural reason: the impacts of the tariffs may be partially mitigated as a majority of our sales and manufacturing takes place outside the United States. AGCO's manufacturing footprint — Germany, France, Brazil, Finland — is a natural tariff hedge that didn't exist in prior cycles. AGCO's 2026 guidance "incorporates the expected impact of tariffs in effect as of February 5, 2026" — a specificity signal that the $65 million impact is baked into the numbers, not a hedge against uncertainty. Compare to Deere, which gave tariff estimates but qualified them with evolving trade policy language.

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CNH and TITN: Two More Ways ROIC Fails

CNH Industrial: Beyond the Data Quality Problem

CNH's pipeline ROIC (31%) is unreliable due to the Foreign Private Issuer transition ($0 debt in XBRL). But the filings reveal problems that the pipeline wouldn't capture even with clean data. MetricDuck's filing intelligence pipeline flagged CNH's cash flow quality as "concerning" — operating cash flow collapsed from $1,737 million to $36 million over nine months, driven by unfavorable working capital swings in receivables and inventory. CNH is the only company where the pipeline rated hidden liabilities risk as "moderate" rather than "low."

Brazil credit deterioration: Receivables more than 30 days past due reached 3.5%, up from 2.2%. Non-performing loans nearly tripled from $68 million to $188 million. Retail credit provisions rose 50% ($173M to $260M). CNH refinanced $110 million from a $480 million portfolio segment with higher delinquency rates. With 64.1% of financing receivables in the retail category and significant Brazilian exposure, this is concentrated geographic credit risk.

Methane strategy retreat: CNH recorded a $48 million impairment on Bennamann IPR&D assets (87% write-down) plus a $10 million T6.180 methane tractor inventory write-down. Combined $59 million signals the alternative fuel tractor initiative is effectively dead — the 10-Q describes "narrowing of strategic focus."

Balance sheet fragility: Tangible book value is -$4.8 billion. The entire equity story depends on $3.6 billion in goodwill and $1.2 billion in intangibles being worth what they claim. Meanwhile, capitalized software grew $165 million (+14%) while revenue fell 13.5% — capitalizing development costs during a revenue decline extends the asset base while reducing the income to support it.

"Continued channel destocking" appears in virtually every revenue and EBIT discussion in the 10-Q. North American Agriculture revenue declined 30.9% for nine months. Large tractors above 140 HP fell 41% in Q3.

Titan Machinery: The Bellwether No One's Reading

TITN is the largest publicly traded ag equipment dealer in North America. Its data is clean — no financial services distortion, no FPI transition — and the picture is devastating.

Three of four segments are operating at a loss:

Segment	Operating Income (Q3)
Agriculture	-$19.0M
Construction	-$7.1M
Australia	-$6.4M
Europe	+$13.4M

The only profitable segment is Europe, driven by Romanian EU agricultural stimulus funding. TITN is divesting its German operations — which were profitable — leaving the remaining European business more concentrated on a single policy-dependent revenue stream.

TITN's full-year guidance: a loss of $1.50 to $2.00 per share. The company's 10-Q cites "recession risk" — unusually bearish language for an SEC filing, where legal review typically softens forward-looking statements. When a dealer puts "recession" in their regulatory filing, they're seeing something on the ground that justifies the legal risk of the word.

TITN's ROIC: 2.1% quarterly, -3.6% trailing twelve months. ROIC versus cost of debt: -9.1 percentage points. This is what ground-level demand looks like — inventory bloated, farmers not buying, and a 199-day cash conversion cycle that means every unsold tractor ties up capital for more than half a year.

When the bellwether dealer is guiding to a full-year loss and citing "recession risk" in its SEC filing, the trough is real.

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What the Filing Language Reveals

Our filing intelligence pipeline extracts management language markers — forward confidence signals, tone changes, and cautionary language — from SEC filings.

MetricDuck's pipeline extracted every forward confidence signal and caution signal from the most recent SEC filing for each company. The results are unanimous:

Deere (10-K, FY2025): 9 caution signals, 0 confidence signals. Pipeline-extracted language includes: "unfavorable market conditions," "lower sales volumes," "greater reliance on sales incentives," "elevated receivable write-offs," "new tariffs were imposed," "retaliatory tariffs," "may impact the prices and profitability of our exported products," "Trade policies are evolving, causing uncertainty," and "lawsuit alleges monopolization and unfair competition." Management tone classified as "mixed" trending "more cautious" versus prior filings.

AGCO (10-Q, Q3 2025): 5 caution signals, 0 confidence signals. Key extraction: "If our assumptions are incorrect, or other issues arise or return, such as tariffs or a worsening of our supply chain, our results of operations will be adversely impacted." Tone: "cautious," also trending "more cautious."

CNH (10-Q, Q3 2025): 5 caution signals, 0 confidence signals. Key extractions: "uncertainty caused by geopolitical events," "production and supply chain disruptions," "consumer confidence and worldwide demand for capital goods." Tone: "cautious."

TITN (10-Q, Q3 FY2026): 5 caution signals, 0 confidence signals. Key extractions: "challenging industry conditions," "softening of demand," "decline in total crop receipts," "expected to continue," "adverse market conditions." Tone: "cautious."

The count is the story: 24 caution signals across four companies. Zero confidence signals. AGCO's Q4 2025 8-K is the lone exception — filed after the Q3 10-Q snapshot above — with management citing "largest-ever share gains in North American large ag," margins "nearly double the performance at the bottom of the last cycle," and growth guidance for 2026. One company breaking from the pattern does not end a downturn, but it's worth noting which one broke first.

Deere's 10-K summarizes the environment in a single sentence: "lower sales volumes, greater reliance on sales incentives, and elevated receivable write-offs." Lower volume, pricing pressure, and credit losses — the classic trifecta.

Construction & Forestry reported -3% price realization and -2% overall — Deere is cutting prices in its weakest segment. The $828 million dealer incentive accrual quantifies the cost of maintaining market share when demand collapses.

SEC filings are legally constrained — management teams are exposed to liability for materially misleading forward-looking statements. When four companies across the same sector produce 24 caution signals and zero confidence signals, it reflects a collective assessment that cannot be dismissed as conservatism.

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The Question Investors Should Ask

This analysis doesn't answer "is Deere a buy." It reframes the question.

Standard ROIC screening suggests Deere and AGCO are similar companies earning 5-6%. They are not. Deere's equipment operations are structurally superior — 30% segment returns, 46-day cash conversion, and 1.48x OCF-to-net-income conversion. These are real and they persist through severe cyclical stress.

But the consolidated entity carries risks that the equipment story doesn't capture — and they're all moving in the same direction, as detailed in the balance sheet and filing language sections above.

AGCO presents a different question. The company hit bottom in Q3, generated record free cash flow, and is the first manufacturer guiding to growth — with an asymmetric tariff advantage. The 10-K resolved the key uncertainties: the revolver is fully repaid, the FY2025 goodwill assessment was clean, and interest coverage recovered to ~4.9x. But North American margins are still negative, and the precision ag strategy depends on PTx Trimble delivering results that haven't materialized yet.

The honest question for Deere: At what price does equipment excellence compensate for the Financial Services tail risk? Both are real. Neither should be ignored. The investors who strip FinServ and see 24% are being incomplete. The investors who see 6% and walk away are missing world-class equipment economics.

The honest question for AGCO: At what price does the earliest recovery signal compensate for the still-negative North American margins and unproven acquisition? Record FCF, full revolver repayment, and growth guidance are real. So is the $351 million write-down and the 10-K's honest qualifier that industry demand is "relatively flat" — not recovering.

Who Holds These Stocks — And What It Tells You

Ownership structure reveals the implicit thesis behind each stock.

Deere's largest individual shareholder is Bill Gates through Cascade Investment, holding approximately 9.3% of shares outstanding (approximately $1.6 billion at recent prices). Gates is also the largest private agricultural landowner in America, with over 270,000 acres. This is not a pure equipment play — it's an "agricultural supply chain" thesis: equipment, land, and financing as a vertically integrated bet on American farming. Gates has held the position since 2011, through multiple cycles.

AGCO's largest shareholder is India's TAFE (Tractors and Farm Equipment Limited) at 16.3% — locked under a perpetual standstill agreement from the June 2025 comprehensive settlement. TAFE must vote in line with AGCO's Board recommendations, cannot nominate directors, and cannot increase its stake above 16.3% except on a change-of-control trigger. In exchange, TAFE received exclusive Massey Ferguson brand rights for India, Nepal, and Bhutan. AGCO's largest shareholder is effectively captive — it can't sell, can't vote against the Board, and can't accumulate more.

CNH is controlled by the Agnelli family through Exor N.V. — 26.9% economic ownership but approximately 45% voting rights via dual-class special voting shares. Public shareholders have limited governance influence. This concentrated control structure explains how CNH can pursue value-destructive strategies (the $59 million methane retreat, the $48 million Bennamann write-down) with less market accountability than a widely held company.

What to Watch

1. Deere Q1 FY2026 earnings (February 19, 2026): First report under interim CFO Ryan Campbell. Consensus expects $1.92 EPS (down approximately 40% YoY) on $7.55 billion revenue. Watch for updated tariff cost estimates, any change in the "trough in 2026" narrative, and whether the CFO transition affects financial guidance
2. CNH FY2025 earnings (February 17, 2026): First full domestic filing. Consensus: $0.11 Q4 EPS, $4.91 billion revenue. Resolves XBRL data quality issues and reveals full-year Brazil credit trends. 2026 guidance language will either confirm or extend the zero-confidence-signal pattern
3. AGCO Q1 2026 results (expected May 2026): First quarter of the guided recovery. Revenue growth confirmation, PTx Trimble contribution trajectory, and whether the 10-K's "relatively flat" demand outlook is conservative or accurate
4. Spring planting season (March-May 2026): Real-time demand indicator. AGCO's 2026 growth guidance is the first from any manufacturer — if spring orders confirm it, the "2025 was the trough" thesis strengthens. Economists expect corn acres to fall from 98.7 million to 93-95 million, with soybeans rebounding — crop rotation economics favoring lower-input crops
5. Tariff resolution matters asymmetrically: Deere faces $1.2 billion in estimated tariff costs for FY2026. AGCO faces $65 million. China's February 2026 retaliatory tariffs on U.S. agricultural machinery widen the gap further. Trade policy evolution is the single largest variable in the DE vs AGCO comparison

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Confounders and Limitations

1. Cyclical trough amplifies structural gaps. The 3.6x return advantage would narrow at mid-cycle. AGCO's North American margins recover from negative to positive in normal environments. Comparing companies at the bottom makes Deere look stronger relative to peers than it would at mid-cycle.

2. Segment assets are not economic capital. The 23.8% (or 30%) equipment return on segment assets is directionally meaningful but should not be compared directly with ROIC figures. Segment asset allocations may not perfectly reflect economic capital deployed. The figure establishes that equipment returns far exceed cost of capital — it doesn't pinpoint the exact spread.

3. DE earnings quality is a contrarian positive. Amid the bearish findings on interest coverage, credit deterioration, and falling ROIC, Deere's 1.48x OCF/NI ratio confirms the equipment returns are genuine cash, not accounting. The operating business is strong. The balance sheet risk is a separate question.

4. AGCO's Q3 interest coverage was misleading. The -1.31x figure (through Q3) included the $351 million PTx Trimble goodwill impairment (a FY2024 charge) pulling GAAP EBIT below interest expense. The 10-K resolved this: FY2025 interest paid was $121.9 million against $595.7 million operating income — approximately 4.9x coverage. AGCO can comfortably service debt from operations. But the impairment itself reflects real economic loss on the acquisition.

5. Geographic and timing mismatches. Deere's fiscal year ends in November. AGCO, CNH, and TITN have calendar or January fiscal years. Different regions (North America vs. Europe vs. Brazil) are at different points in the agricultural cycle. Currency effects influence reported results.

6. CNH data is unreliable for ROIC due to the FPI-to-domestic transition. We include CNH's filing intelligence findings but do not base ROIC conclusions on its pipeline data.

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Explore the Data

• Deere (DE) Earnings | ROIC | Filing Intelligence | Analysis
• AGCO Earnings | ROIC | Filing Intelligence | Analysis
• CNH Industrial Earnings | ROIC | Filing Intelligence | Analysis
• Titan Machinery (TITN) Earnings | ROIC | Filing Intelligence | Analysis

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• Gold Miners Capital Allocation: NEM vs AEM vs Barrick — AISC, ROIC, and jurisdiction risk across gold mining's Big Three

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Methodology

ROIC: NOPAT (EBIT × (1 - effective tax rate)) divided by the greater of invested capital (working capital + PP&E + goodwill + intangibles) or total capital (total debt + total equity). For Deere, total capital ($83.3B) dominates because Financial Services debt ($57.3B) far exceeds equipment invested capital ($5.4B). This is methodologically correct but analytically misleading for financial-industrial hybrids.

Equipment Segment Analysis: Return on segment assets = segment operating income / segment total assets, as reported in the 10-K segment footnote. This is a pre-tax return metric, not ROIC.

Period Alignment: DE FY ends November; AGCO/CNH/TITN are calendar or January fiscal years. All use latest available filing periods.

Trend Metrics: Q.MED8 = 8-quarter median (stable baseline). Q.TREND8 = linear regression slope per quarter (rate of change).

Data Provenance

Every quantitative metric in this article is computed by MetricDuck from machine-readable SEC filings. No third-party data providers — all data flows from SEC EDGAR to MetricDuck to this article.

Data Type	Source	MetricDuck Pipeline
ROIC, margins, CCC, coverage, valuation multiples	XBRL financial facts	filing_metrics (computed)
Segment performance	10-K/10-Q footnotes	filing_intelligence (extracted)
Management tone, confidence/caution signals	MDA narrative analysis	filing_intelligence (NLP-extracted)
8-K earnings highlights, guidance ranges	Earnings releases	earnings_insights (extracted)
Market prices, P/E, EV multiples	XBRL + market data	filing_metrics (computed)

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This analysis is based on publicly available SEC filings and is provided for informational purposes only. It does not constitute investment advice. Investors should conduct their own due diligence.

Updated February 15, 2026 with AGCO FY2025 10-K deep dive: covenant resolution ($0 revolver at year-end, ~4.9x interest coverage), parts revenue disaggregation ($1,873M, +3.2% while tractors fell 23%), PTx Trimble impairment timeline clarification (FY2024 charge, FY2025 assessment clean), inventory signals, debt maturity schedule, 10-K outlook language, and filing quote links. This article will be further updated after Deere Q1 FY2026 (February 19, 2026), CNH FY2025 (February 17, 2026), and AGCO Q1 2026 (expected May 2026).