Archer Daniels Midland stock price target raised to $70 by UBS on crush spread strength

Investing.com - UBS raised its price target on Archer Daniels Midland (NYSE:ADM) to $70.00 from $60.00 on Monday, while maintaining a Buy rating on the agricultural processing company. The $27.8 billion market cap company, which boasts a defensive beta of 0.66, is currently trading at $57.84. According to InvestingPro analysis, ADM appears slightly undervalued based on its Fair Value calculations.

The price target increase reflects strength in crush spread margins and improvements in ADM’s nutrition business, according to UBS. The firm adjusted its earnings per share estimates upward, with 2025 EPS now projected at $3.93, up from $3.74 previously. ADM has demonstrated strong financial stability with a healthy current ratio of 1.42 and has maintained dividend payments for 55 consecutive years, as highlighted in InvestingPro’s comprehensive analysis.

UBS also raised its longer-term outlook, with 2026 EPS estimates increasing to $4.97 from $4.33, and 2027 EPS projections rising to $5.81 from $5.08.

The firm noted that higher proposed Renewable Volume Obligations (RVO) would likely force renewable diesel plants operated by refiners to increase utilization rates by 2026. This situation would create upward pressure on domestic feedstock prices.

UBS identified ADM as "one of the best positioned to benefit from this potential upcycle in soy crush margins," with the company expected to gain as a domestic feedstock provider to biodiesel and renewable diesel plants.

In other recent news, Archer Daniels Midland (ADM) reported its second-quarter earnings for 2025, with an adjusted earnings per share (EPS) of $0.93, exceeding the forecasted $0.80. However, the company fell short of revenue expectations, reporting $21.17 billion compared to the anticipated $21.81 billion. Additionally, ADM announced a quarterly cash dividend of 51 cents per share, continuing its long-standing tradition of dividend payments for 93 years. Barclays (LON:BARC) has upgraded ADM from Underweight to Equalweight, raising its price target to $61.00, citing improvements in the Nutrition segment. The Decatur East plant, which had been offline, is now operational and expected to reduce costs by $20-$25 million per quarter by the fourth quarter. These developments reflect ADM’s strategic focus on innovation and market optimization.

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