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Archer-Daniels Midland Co ADM

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Stock XNYS Rating as of
$61.59 +1.51 (2.51%)
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Company Report

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Archer-Daniels Midland Earnings: Profit Decline in Line With Our Outlook for the Year

Seth Goldstein

Archer-Daniels Midland's first-quarter earnings were consistent with our outlook for 2024. Adjusted segment operating profits were down 24% versus the prior-year quarter, largely driven by lower ag services and oilseeds results, which generate the majority of companywide profits. In 2024, we expect the ag services and oilseeds business to see lower profits due to falling crop prices as conditions moderate closer to the midcycle level following the cyclical peak in 2022 and a slight decline in 2023. Management maintained its guidance for the year for adjusted earnings per share to come in at $5.25-$6.25. We think this level is achievable, yet we forecast ADM to come in toward the bottom of the range.

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Price vs Fair Value

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ADM is trading at a 360% premium.
Price
$61.59
Fair Value
$99.00
Uncertainty
High
1-Star Price
$71.00
5-Star Price
$82.00
Economic Moat
Gsz
Capital Allocation
Xqbqrnbh

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

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Trading Information

Previous Close Price
$60.08
Day Range
$60.15–62.12
52-Week Range
$51.49–87.30
Bid/Ask
$61.05 / $62.27
Market Cap
$30.45 Bil
Volume/Avg
4.7 Mil / 4.8 Mil

Key Statistics

Price/Earnings (Normalized)
9.71
Price/Sales
0.36
Dividend Yield (Trailing)
3.08%
Dividend Yield (Forward)
3.25%
Total Yield
15.07%

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
Website
https://www.adm.com

Competitors

Valuation

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Metric
ADM
INGR
IFF
Price/Earnings (Normalized)
 9.7113.6637.27
Price/Book Value
 1.332.091.72
Price/Sales
 0.361.012.17
Price/Cash Flow
 7.638.3323.71
Price/Earnings
ADM
INGR
IFF

Financial Strength

Metric
ADM
INGR
IFF
Quick Ratio
 0.371.350.75
Current Ratio
 1.472.441.68
Interest Coverage
 5.959.48−5.87
Quick Ratio
ADM
INGR
IFF

Profitability

Metric
ADM
INGR
IFF
Return on Assets (Normalized)
 6.51%7.71%1.21%
Return on Equity (Normalized)
 14.84%16.85%2.46%
Return on Invested Capital (Normalized)
 10.73%11.19%2.46%
Return on Assets
ADM
INGR
IFF
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