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Archer-Daniels Midland Co ADM

Morningstar Rating
$62.81 −0.18 (0.29%)
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Company Report

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.

Price vs Fair Value

ADM is trading at a 4% premium.
Price
$62.51
Fair Value
$84.00
Uncertainty
High
1-Star Price
$24.00
5-Star Price
$24.00
Economic Moat
Nfw
Capital Allocation
Gzwmsxpv

Bulls Say, Bears Say

Bulls

With a global network of processing, storage, and transportation assets, ADM has scale advantages over regional competitors. Its trading operations are often able to generate arbitrage opportunities from extensive market knowledge produced by the global origination and logistics network.

Bears

Grain merchandisers, including ADM, will continue to face structural headwinds as farmers and grain buyers have better access to price information. This will limit trading profits over the long term.

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News

Trading Information

Previous Close Price
$62.99
Day Range
$62.6363.42
52-Week Range
$51.4987.30
Bid/Ask
$62.60 / $62.96
Market Cap
$32.02 Bil
Volume/Avg
4.1 Mil / 5.8 Mil

Key Statistics

Price/Earnings (Normalized)
9.04
Price/Sales
0.36
Dividend Yield (Trailing)
2.94%
Dividend Yield (Forward)
3.18%
Total Yield
11.26%

Company Profile

Archer-Daniels Midland is a major processor of oilseeds, corn, wheat, and other agricultural commodities. The company is also one of the largest grain merchandisers through its extensive network of logistical assets to store and transport crops around the globe. ADM also runs a nutrition business that focuses on both human and animal ingredients and is a large producer of corn-based sweeteners, starches, and ethanol.
Sector
Consumer Defensive
Industry
Farm Products
Stock Style Box
Mid Value
Total Number of Employees
41,802

Competitors

Valuation

Metric
ADM
IFF
INGR
Price/Earnings (Normalized)
9.0436.7612.54
Price/Book Value
1.341.502.18
Price/Sales
0.361.900.97
Price/Cash Flow
7.2222.898.07
Price/Earnings
ADM
IFF
INGR

Financial Strength

Metric
ADM
IFF
INGR
Quick Ratio
0.420.740.95
Current Ratio
1.601.671.92
Interest Coverage
6.87−5.638.36
Quick Ratio
ADM
IFF
INGR

Profitability

Metric
ADM
IFF
INGR
Return on Assets (Normalized)
6.67%0.70%8.68%
Return on Equity (Normalized)
15.33%1.40%19.76%
Return on Invested Capital (Normalized)
11.10%1.90%12.55%
Return on Assets
ADM
IFF
INGR
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