On Wednesday, Citi analysts adjusted the price target for Archer Daniels Midland (NYSE: NYSE:ADM) stock, lowering it to $53 from the previous $55, while maintaining a Neutral rating on the company.
With the stock currently trading near its 52-week low of $48.92, InvestingPro analysis suggests ADM is undervalued, trading at an attractive P/E ratio of 13.9x. The adjustment comes with the anticipation of weaker underlying margins in ADM's Agricultural Services & Oilseeds (AS&O) and Carbohydrate Solutions segments.
The analysts project that the restart of operations at the Decatur East facility, which is expected in the first quarter of 2025, could provide some relief to the earnings pressures faced by ADM. Moreover, anticipated insurance proceeds and share repurchase activities are seen as potential mitigating factors for the company's financial performance.
For the fourth quarter of 2024, there is a possibility of mark-to-market gains in the Crushing segment, which could positively impact ADM's financial results. Earnings per share (EPS) estimates for the company have been revised, with the 2024 EPS forecast increasing slightly to $4.85, up from $4.80. However, the estimates for 2025 and 2026 have been reduced to $4.46 and $4.61, respectively, from the earlier projections of $4.49 and $4.63.
The analysts have based the valuation of ADM shares on the anticipated earnings for the year 2026. Despite the reduction in the price target, the analysts' stance on ADM stock remains neutral, suggesting a wait-and-see approach for investors as the company navigates through the forecasted margin challenges and potential earning offsets. For deeper insights into ADM's valuation metrics and 12+ additional exclusive ProTips, visit InvestingPro, where you'll find comprehensive analysis in our detailed Pro Research Report.
In other recent news, Archer-Daniels-Midland (ADM) has been in the limelight for various reasons. The company has faced criticism from shareholder Hartwig Fuchs, who has called for the resignation of CEO Juan Luciano over alleged transparency issues. Meanwhile, ADM has expanded its share buyback program, with the board authorizing an additional purchase of 100 million shares and extending the program's duration by five years.
Stephens has resumed coverage on ADM stock, issuing an Equal Weight rating and setting a price target of $55.00. In contrast, BMO Capital Markets has reduced the stock's price target from $55.00 to $51.00, maintaining a Market Perform rating.
On the financial front, ADM reported third-quarter earnings per share (EPS) of $1.09, falling short of expectations due to weaker profits in key segments. This led to a downward revision of its 2024 earnings guidance to a range of $4.50 to $5.00. Despite this, the company declared a 50-cent quarterly cash dividend, marking its 372nd consecutive payment.
Analysts from Barclays (LON:BARC) has maintained its Overweight rating on ADM stock. Barclays adjusted its profitability expectations for the company, citing a decrease in operating income projections by 13% to $1 billion. These are the recent developments in ADM's operations.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.