Barclays upgrades Archer Daniels Midland stock to Equalweight on Nutrition improvements

Published 06/08/2025, 09:16
Barclays upgrades Archer Daniels Midland stock to Equalweight on Nutrition improvements

Investing.com - Barclays (LON:BARC) has upgraded Archer Daniels Midland (NYSE:ADM) from Underweight to Equalweight and raised its price target to $61.00 from $50.00, citing improvements in the company’s Nutrition segment and a recovering crush outlook. The $27.7 billion food products giant has shown strong momentum, with shares surging 29% over the past six months. According to InvestingPro analysis, ADM is currently trading near its Fair Value.

The Decatur East plant, which produces Nutrition products, is now back online after an extended downtime and ramping up to planned production rates. The shutdown had created a $20-$25 million headwind per quarter, which should be eliminated from costs by the fourth quarter.

Barclays noted that the Renewable Volume Obligation proposal alongside a domestic focus on 45Z tax credits will lift margins in the fourth quarter and beyond 2026, limiting downside risk for the stock at current levels.

ADM has confirmed it successfully remediated material weaknesses in internal controls for segment disclosures related to reporting, pricing and measurement by implementing refined intersegment policies, measurement controls, and training.

The company has identified potential risks to its guidance, noting that if crush or replacement margin does not increase as expected, earnings per share could be impacted by approximately 15 cents, while ethanol performance is expected to remain softer year-over-year.

In other recent news, Archer-Daniels-Midland Company (ADM) reported its second-quarter earnings for 2025, delivering an adjusted earnings per share (EPS) of $0.93, which exceeded the analysts’ forecast of $0.80. However, the company fell short of revenue expectations, posting $21.17 billion compared to the anticipated $21.81 billion. Despite this revenue miss, ADM’s stock saw a positive reaction, attributed to the earnings beat and the company’s strategic initiatives. These developments reflect ADM’s ongoing efforts in innovation and optimizing market strategies. Investors appear to have responded favorably to the company’s performance and strategic direction. As these are recent developments, ADM’s financial performance continues to be a focal point for investors and analysts alike.

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