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Investing.com - UBS reiterated a Buy rating and $70.00 price target on Archer Daniels Midland (NYSE:ADM), a prominent player in the Food Products industry with a $29.57B market cap, following the company’s announcement of a new North American animal feed joint venture with Alltech. According to InvestingPro analysis, ADM appears slightly undervalued at current levels, with strong financial metrics supporting its growth trajectory.
The joint venture will combine significant assets from both companies, with Alltech contributing its U.S.-based Hubbard Feeds and Canada-based Masterfeeds business, including 18 U.S. feed mills and 15 Canadian feed mills. ADM will contribute 11 U.S. feed mills to the partnership. The company’s solid financial position is evident in its healthy current ratio of 1.42, indicating strong ability to meet short-term obligations.
Certain operations will remain outside the joint venture structure. Alltech will retain its Ridley Block Operations, Ridley Feed Ingredients, and Specialty Ingredients businesses, though these units will serve as suppliers and partners to the joint venture. Similarly, ADM will keep its Canadian locations and U.S. premix and additive businesses, which will help supply the partnership.
The joint venture will be majority-owned by Alltech and governed by a board with equal representation from each company. The partnership builds on a historical relationship, as ADM was Alltech’s first customer.
The new joint venture is expected to formally launch in the first quarter of 2026, combining the North American feed strengths and broader agricultural and feed value chains of both companies. ADM has shown impressive momentum with a 34.66% return over the past six months. For deeper insights into ADM’s financial health and growth potential, including 10+ additional ProTips, check out the comprehensive research available on InvestingPro.
In other recent news, Archer Daniels Midland (ADM) and Alltech have announced a definitive agreement to create a North American animal feed joint venture, expected to launch in the first quarter of 2026. This partnership will combine Alltech’s Hubbard Feeds and Masterfeeds businesses with ADM’s U.S. feed mills, involving a total of 44 facilities across the United States and Canada. Additionally, ADM has surpassed its 2025 regenerative agriculture goal ahead of schedule, engaging over 5 million acres in sustainable farming practices. UBS has reiterated its Buy rating on ADM stock, raising the price target to $70.00, citing strong crush spread margins and improvements in the nutrition business. UBS has also adjusted its earnings per share estimates for 2025 to $3.93, up from a previous projection of $3.74. Meanwhile, JPMorgan has assumed coverage of ADM with a Neutral rating, setting a price target of $61.00, noting potential earnings benefits from improved margins in the Crushing and Nutrition segments. These developments indicate significant strategic moves and analyst interest in ADM’s future performance.
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