Archer-Daniels Midland Overvalued as We See Long-Term Grain Merchandising Conditions Moderating

After updating our model to incorporate Archer-Daniels Midland's third-quarter results, we raise our fair value estimate to $70 per share from $67. Our no-moat rating is unchanged. The primary driver of our fair value estimate increase is our improved near-term outlook as we expect grain merchandising conditions will remain favorable for the rest of 2022 and into 2023. Accordingly, we have raised our near-term outlook for its ag services and oil seeds business, which generates the majority of companywide profits.