Analyst Steven Haynes from Morgan Stanley maintained a Hold rating on Archer Daniels Midland (ADM – Research Report) and keeping the price target at $52.00.
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Steven Haynes has given his Hold rating due to a combination of factors related to Archer Daniels Midland’s recent financial performance and future outlook. The company’s fourth-quarter earnings per share were in line with expectations, but the guidance for the first quarter and the full year of 2025 fell short of consensus estimates, although it was slightly ahead of Morgan Stanley’s own estimates. This guidance reflects weaker market fundamentals and uncertainty in biofuel policies, adding to the cautious stance.
Another reason for the Hold rating is the expected challenges in the first half of the year, with uncertainties in trade, biofuels, and agricultural production, although improvements are anticipated in the latter half with better biofuel policy clarity and increased soybean meal demand. Additionally, ADM’s announced cost-saving measures, while positive for the long-term outlook, are not seen as enough to shift the current rating. The visibility into future savings is encouraging, but the operational challenges present significant concerns, justifying a Hold rating rather than a more optimistic outlook.