Chicago-based Archer-Daniels-Midland Company (ADM) engages in the procurement, transportation, storage, processing, and merchandising of agricultural commodities, ingredients, flavors, and solutions. With a market cap of $29.4 billion, the company’s operations span the Americas, Europe, and internationally. The farm products giant is expected to release its Q3 earnings on Tuesday, Oct. 22.
Ahead of the event, analysts expect Archer-Daniels-Midland to report a profit of $1.38 per share, down 15.3% from $1.63 per share reported in the year-ago quarter. The company has surpassed Wall Street’s EPS projections twice over the past four quarters while missing the estimates on two other occasions. Its EPS for the last reported quarter declined by 45.5% year-over-year to $1.03 and missed the consensus estimates by 16.3%.
For fiscal 2024, analysts expect ADM to report an EPS of $5.33, down 23.6% from $6.98 in fiscal 2023. The EPS is expected to hold steady in fiscal 2025.
ADM has dipped 18.6% on a YTD basis, substantially underperforming the S&P 500 Index’s ($SPX) 19.7% gains and the Consumer Staples Select Sector SPDR Fund’s (XLP) 13.9% returns during the same time frame.
Archer-Daniels-Midland had a bad start to the year. ADM stock experienced the biggest one-day drop since 1929, plummeting over 24% on Jan. 22 after the company placed its CFO Vikram Luthar on administrative leave as it started investigating accounting practices in its Nutrition segment. This created panic among investors leading to a massive sell-off.
ADM dipped 1.3% and continued to trade in the red territory for the next five trading sessions after the release of its Q2 earnings on Jul. 30. During the quarter, ADM experienced a decline in both revenues and profit margins. Its revenues fell 11.7% year-over-year to $22.2 billion, while its net income plunged 47.6% to $486 million. More notably, its net margins contracted by 1.5% to a mere 2.2%, raising concerns regarding the company’s efficiency.
The consensus opinion on the ADM stock is neutral, with an overall “Hold” rating. Out of the 11 analysts covering the stock, 10 analysts recommend a “Hold,” and one suggests a “Strong Sell” rating.
The mean price target of $62.50 suggests a potential upside of 6.3% from current price levels.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
