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Archer Daniels Midland (ADM)
NYSE:ADM

Archer Daniels Midland (ADM) AI Stock Analysis

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Archer Daniels Midland

(NYSE:ADM)

Rating:66Neutral
Price Target:
$58.00
▲(4.86%Upside)
ADM's overall stock score is driven by its solid financial stability and strategic cost-saving initiatives, balanced by challenges in revenue growth and cash flow pressures. Technical indicators suggest caution due to potential overbought conditions, while valuation metrics present a mixed picture with a reasonable P/E ratio and an attractive dividend yield. Earnings call insights highlight strategic adjustments and improvements in specific segments, but ongoing market pressures necessitate careful monitoring.
Positive Factors
Cost Efficiency
ADM announced $200-300 million of cost savings in 2025 and $500-750 million of savings over the next 3-5 years, driven by improvements in manufacturing costs and targeted workforce reductions.
Earnings Growth
Policy tailwinds are expected to drive earnings growth, boosting the company's future prospects.
Market Position
ADM is relatively-better positioned against most companies in the new macro landscape.
Negative Factors
Biofuel Policy Uncertainty
The ag cycle is at a trough, and biofuels policies remain uncertain, potentially keeping a lid on profitability and positioning downside risk.
Profitability Outlook
The outlook for ADM’s profitability has soured considerably with increased macro risks stemming from the US election results as well as the company’s own performance.
Trade Policies
Chinese tariffs on US crop exports should pressure ADM’s trading profits.

Archer Daniels Midland (ADM) vs. SPDR S&P 500 ETF (SPY)

Archer Daniels Midland Business Overview & Revenue Model

Company DescriptionArcher Daniels Midland (ADM) is a global leader in human and animal nutrition and the world's premier agricultural origination and processing company. Operating across a variety of sectors, ADM is involved in the production and distribution of a wide array of products, including oilseeds, corn, wheat, cocoa, and other agricultural commodities. The company is also a prominent player in the food and beverage industry, providing ingredients and solutions to enhance the taste, texture, and nutritional profile of products. With a strong focus on sustainability and innovation, ADM serves a diverse range of industries and customers worldwide.
How the Company Makes MoneyADM generates revenue through several key streams: agricultural services, oilseeds processing, carbohydrate solutions, and nutrition. In the agricultural services segment, ADM earns money by sourcing, storing, and transporting agricultural commodities to meet global demand. In oilseeds processing, the company processes soybeans, cottonseed, sunflower seeds, canola, peanuts, and flaxseed into vegetable oils, protein meals, and other value-added products, which are sold to food, feed, energy, and industrial markets. The carbohydrate solutions segment involves the processing of corn and wheat into sweeteners, starches, and bioproducts, with applications in food and industrial sectors. The nutrition segment focuses on creating innovative ingredients and solutions for human and animal nutrition, including flavors, colors, and health-promoting ingredients. Significant partnerships and investments in research and development, as well as a commitment to sustainability, also play crucial roles in ADM's earnings by enhancing operational efficiencies and expanding market opportunities.

Archer Daniels Midland Earnings Call Summary

Earnings Call Date:May 06, 2025
(Q1-2025)
|
% Change Since: 17.63%|
Next Earnings Date:Jul 29, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a balanced performance with significant challenges in the AS&O segment due to lower crush margins and trade policy uncertainties, contrasted by successful cost-saving initiatives, record safety achievements, and a recovering Nutrition segment.
Q1-2025 Updates
Positive Updates
Adjusted Earnings Per Share
ADM reported adjusted earnings per share of $0.70, aligning with market expectations.
Record Safety Achievement
ADM reported the lowest Q1 total recordable incident rate in the company's history.
Cost Savings Initiatives
Progress on target of $500 million to $750 million in cost savings over the next three to five years, including workforce reduction and reduction in SG&A costs.
Nutrition Segment Recovery
Nutrition segment operating profit increased by 13% year-over-year, driven by improvements in Flavors and Animal Nutrition.
Negative Updates
AS&O Segment Decline
Ag Services and Oilseeds operating profit was $412 million, down 52% compared to the prior year, due to lower meal and vegetable oil values.
Crushing Subsegment Weakness
Operating profit was $47 million, down 85% due to lower global soybean and canola crush execution margins.
Starches and Sweeteners Challenges
Operating profit for Starches and Sweeteners was $207 million, down 21% compared to the prior year, due to demand softness and lower ethanol margins.
Trade Policy Uncertainty
Trade policy uncertainty, particularly with Canada and China, created volatility and impacted export volumes.
Company Guidance
During ADM's first-quarter 2025 earnings call, the company reported an adjusted earnings per share of $0.70 and a total segment operating profit of $747 million. The trailing fourth-quarter adjusted return on invested capital (ROIC) was 7%, and cash flow from operations before working capital changes stood at $439 million. ADM's Carbohydrate Solutions segment performed well with positive margins in sweeteners and strong ethanol execution, while the Nutrition segment showed signs of recovery, particularly in Flavors and Animal Nutrition. The Ag Services and Oilseeds segment faced challenges due to market uncertainty but implemented organizational realignment and network optimization. The company also made progress in recommissioning its Decatur East facility and reported the lowest Q1 total recordable incident rate in its history. Additionally, ADM is on track to achieve $500 million to $750 million in cost savings over the next three to five years, with significant reductions in SG&A costs, strategic facility closures, and network optimizations. Despite these efforts, ADM's full-year adjusted EPS guidance remains between $4 and $4.75 per share, with expectations to be at the lower end of this range due to ongoing market pressures.

Archer Daniels Midland Financial Statement Overview

Summary
Archer Daniels Midland shows a mix of strengths and challenges across its financial statements. The income statement reveals solid historical profit margins, but recent revenue and profit growth challenges are evident. The balance sheet indicates strong financial stability with good leverage management and equity ratios. However, the significant decline in free cash flow growth presents a potential risk. Overall, while ADM is financially stable, it must address revenue and cash flow pressures to sustain long-term growth.
Income Statement
75
Positive
Archer Daniels Midland's income statement shows a strong historical gross profit margin, which stood at approximately 6.3% for the TTM period. However, the net profit margin has decreased from previous years to about 1.6% due to a decline in net income. Revenue growth has been volatile, decreasing by 2% in the most recent TTM period. Overall, the company maintains reasonable profitability but faces challenges with recent revenue contraction.
Balance Sheet
80
Positive
The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.56, indicating a balanced approach to leverage. The equity ratio is healthy at approximately 41.4%, suggesting strong equity financing. Return on equity is moderate at around 6.2% for the TTM, showing a slight decline from previous years. Overall, ADM exhibits solid financial stability despite fluctuating equity returns.
Cash Flow
70
Positive
Cash flow analysis reveals a decrease in free cash flow, which fell significantly by 81.7% in the TTM period. The operating cash flow to net income ratio is robust at 1.28, indicating effective cash generation from operations. However, the decline in free cash flow growth presents concerns about cash availability for future investments. Overall, while operating cash flows remain strong, the reduction in free cash flow growth is a potential risk.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue83.86B85.53B93.94B101.85B85.25B64.36B
Gross Profit5.30B5.78B7.51B7.57B5.99B4.45B
EBITDA3.57B4.10B6.01B6.67B4.58B3.18B
Net Income1.37B1.80B3.48B4.34B2.71B1.77B
Balance Sheet
Total Assets53.40B53.27B54.63B59.77B56.14B49.72B
Cash, Cash Equivalents and Short-Term Investments897.00M857.00M5.39B1.04B943.00M666.00M
Total Debt12.42B11.54B9.60B10.29B10.58B11.05B
Total Liabilities31.02B30.84B30.17B35.16B33.37B29.62B
Stockholders Equity22.12B22.17B24.13B24.28B22.48B20.00B
Cash Flow
Free Cash Flow224.00M1.23B2.97B2.16B5.43B-3.21B
Operating Cash Flow1.75B2.79B4.46B3.48B6.59B-2.39B
Investing Cash Flow-1.60B-2.70B-1.50B-1.40B-2.67B4.46B
Financing Cash Flow-941.00M-1.53B-4.60B-2.50B-1.12B-423.00M

Archer Daniels Midland Technical Analysis

Technical Analysis Sentiment
Positive
Last Price55.31
Price Trends
50DMA
49.65
Positive
100DMA
47.95
Positive
200DMA
50.18
Positive
Market Momentum
MACD
1.59
Negative
RSI
67.73
Neutral
STOCH
87.05
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ADM, the sentiment is Positive. The current price of 55.31 is above the 20-day moving average (MA) of 51.94, above the 50-day MA of 49.65, and above the 200-day MA of 50.18, indicating a bullish trend. The MACD of 1.59 indicates Negative momentum. The RSI at 67.73 is Neutral, neither overbought nor oversold. The STOCH value of 87.05 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ADM.

Archer Daniels Midland Risk Analysis

Archer Daniels Midland disclosed 17 risk factors in its most recent earnings report. Archer Daniels Midland reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Archer Daniels Midland Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
84
Outperform
$5.48B5.0848.27%13.43%60.00%259.01%
SFSFD
73
Outperform
$9.61B
12.27%
FDFDP
72
Outperform
$1.59B10.827.51%3.62%-0.64%
TSTSN
70
Outperform
$20.03B21.855.01%3.49%1.39%
BGBG
69
Neutral
$10.54B9.9410.36%3.57%-10.90%-36.54%
ADADM
66
Neutral
$26.57B19.726.03%3.69%-8.59%-50.72%
65
Neutral
$10.77B15.805.51%1.90%3.03%-26.66%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ADM
Archer Daniels Midland
55.31
-5.63
-9.24%
BG
Bunge Global
78.44
-28.38
-26.57%
CALM
Cal-Maine Foods
102.90
44.40
75.90%
FDP
Fresh Del Monte Produce
33.13
12.55
60.98%
TSN
Tyson Foods
57.36
2.49
4.54%
SFD
Smithfield Foods
24.45
4.44
22.19%

Archer Daniels Midland Corporate Events

Shareholder Meetings
Archer Daniels Midland Holds Annual Stockholders Meeting
Neutral
May 14, 2025

On May 8, 2025, Archer Daniels Midland held its Annual Meeting of Stockholders where all board nominees were elected, executive compensation was approved, and Ernst & Young LLP was ratified as independent auditors for 2025. However, a proposal to remove the one-year holding period requirement for calling a special stockholder meeting was not passed.

The most recent analyst rating on (ADM) stock is a Hold with a $66.00 price target. To see the full list of analyst forecasts on Archer Daniels Midland stock, see the ADM Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jun 17, 2025