Chicago, Illinois-based Archer-Daniels-Midland Company (ADM) procures, transports, stores, processes, and merchandises agricultural commodities, ingredients, flavors, and solutions. With a market cap of $28.4 billion, the company processes oilseeds, corn, milo, oats, barley, peanuts, and wheat, as well as produce products which have primarily two end uses, including food or feed ingredients.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and ADM perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the farm products industry. ADM leverages a competitive edge through its extensive network of processing facilities and logistics assets, enabling efficient management of diverse agricultural commodities and solidifying its role as a critical player in the global food supply chain. Strategic acquisitions and a strong commitment to innovation enhance its capabilities, expand its reach, and position the company for future growth in sustainable nutrition.
Despite its notable strength, ADM slipped 9.2% from its 52-week high of $65, achieved on Oct. 27. Over the past three months, ADM stock declined 6.2%, underperforming the Consumer Staples Select Sector SPDR Fund’s (XLP) 3% drop during the same time frame.
In the longer term, shares of ADM rose 25.6% on a six-month basis and climbed 12.9% over the past 52 weeks, outperforming XLP’s six-month 3.7% losses and 5.2% dip over the last year.
To confirm the bullish trend, ADM has been trading above its 200-day moving average since mid-June. However, the stock has been trading below its 50-day moving average since late October, with minor fluctuations.
On Nov. 4, ADM reported its Q3 results, and its shares closed down more than 6% in the following trading session. Its adjusted EPS of $0.92 beat Wall Street expectations of $0.89. The company’s revenue stood at $20.4 billion, up 2.2% year over year. ADM expects full-year adjusted EPS in the range of $3.25 to $3.50.
In the competitive arena of farm products, Bunge Global SA (BG) has taken the lead over ADM, showing resilience with a 26.8% uptick on a six-month basis, but lagged behind the stock with solid 8.6% gains over the past 52 weeks.
Wall Street analysts are cautious on ADM’s prospects. The stock has a consensus “Hold” rating from the 11 analysts covering it. While ADM currently trades above its mean price target of $56.89, the Street-high price target of $70 suggests an 18.6% upside potential.
