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Archer-Daniels Midland Co ADM

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Raising Fair Value Estimate to $49 as Archer Daniels Midland Crushes Soy Profits; Shares Overvalued

Seth Goldstein, CFA Senior Equity Analyst

Analyst Note

| Seth Goldstein, CFA |

Archer Daniels Midland delivered strong first-quarter results as operating profits were up 86% versus the prior-year quarter due to profit growth in all segments, highlighted by roughly 5.5 times higher profits in the crushing business. While we had expected its results would reflect the favorable agribusiness conditions, we have increased our near-term outlook to account for higher ag services and oilseeds segment profits. Our long-term outlook is unchanged. Having updated our model, we raise our fair value estimate for the firm to $49 per share from $46. Our no-moat rating is unchanged.

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Company Profile

Business Description

Archer Daniels Midland is a major processor of oilseeds, corn, wheat, and other agricultural commodities. Additionally, the company owns an 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.

77 West Wacker Drive, Suite 4600
Chicago, IL, 60601
T +1 312 634-8100
Sector Consumer Defensive
Industry Farm Products
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 30, 2020
Stock Type Slow Growth
Employees 39,088