Archer-Daniels Midland Earnings: Restated Nutrition Profits In Line With Our Estimates

We're maintaining our $60 fair value estimate following Archer-Daniels Midland's fourth-quarter results. Our no moat rating is also unchanged. ADM reported fourth-quarter earnings far later than usual, as the company was reviewing its accounting practices for intersegment sales related to the nutrition business. When ADM announced it was reviewing the nutrition business financials, we estimated that 2023 nutrition profits would decline by over 40%. Management reported a 42% decline in 2023 versus the restated 2022 profits. While ADM is still under investigation from the US Securities and Exchange Commission and the US Department of Justice and could face fines, we think the bulk of the impact, adjusted in the restated financial statements, is likely complete.