We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Archer Daniels Midland (ADM - Free Report) delivered impressive first-quarter 2022 results in late April, as both top and bottom lines advanced year over year. This marked the 10th straight quarter of adjusted operating profit growth.
Despite supply-chain headwinds, results gained from solid demand, improved productivity, product innovations and persistent growth in the Nutrition segment.
Management expects reduced crop supplies, stemming from weak Canadian canola crops, the short South American crops and disruptions in the Black Sea region to affect global grain markets for the next few years.
ADM is one of the world's leading producers of food and beverage ingredients as well as goods made from various agricultural products.
The company processes oilseeds, corn, wheat, cocoa and other feedstuffs. Moreover, it engages in the manufacturing, sale, and distribution of products like natural flavor ingredients, flavor systems, natural colors, proteins, emulsifiers, soluble fiber, polyols, hydrocolloids, natural health and nutrition products as well as other specialty food and animal feed ingredients.
Zacks Outlook
ADM Q1 results reflected gains from healthy product demand and strength in the Nutrition segment, while reduced crop supplies have been a drag on performance.
This marked the 11th straight quarter of an earnings surprise and the 10th straight quarter of adjusted operating profit growth. Results gained from solid demand, improved productivity and product innovations.
Persistent growth in the Nutrition segment, driven by significant gains in the Human and Animal Nutrition units, remained key growth drivers. Management expects the nutrition segment operating profit growth of 20% in 2022.
However, dismal margins and rising SG&A costs are deterrents. Higher inflation and issues related to the short crop in South America, stemming from the conflict in Ukraine, remain concerning.
On balance, we rate ADM Outperform for the next 6-12 months with Value, Growth, and Momentum scores of B, C, and B respectively.
Analysts Raise Estimates
The reason that ADM is a Zacks #1 Rank again is purely based on analysts raising their EPS estimates with sufficient magnitude and agreement.
After April earnings, the Zacks Consensus Estimate for this year jumped nearly 20% from $5.15 to $6.13.
But in the last few weeks, analysts have been nudging up estimates more, pushing the consensus to $6.33, representing 22% annual growth.
And the topline now sits at $95.75 billion, for a projected 12.3% advance year-on-year.
Analysts are clearly expecting a strong Q2 from ADM with Jefferies boosting their expectations for the quarter from $1.28 to $1.75.
ADM is expected to report again in late July. Until then, the current market pullback looks like a great opportunity to grab some shares under $80.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Bull of the Day: Archer Daniels Midland (ADM)
Archer Daniels Midland (ADM - Free Report) delivered impressive first-quarter 2022 results in late April, as both top and bottom lines advanced year over year. This marked the 10th straight quarter of adjusted operating profit growth.
Despite supply-chain headwinds, results gained from solid demand, improved productivity, product innovations and persistent growth in the Nutrition segment.
Management expects reduced crop supplies, stemming from weak Canadian canola crops, the short South American crops and disruptions in the Black Sea region to affect global grain markets for the next few years.
ADM is one of the world's leading producers of food and beverage ingredients as well as goods made from various agricultural products.
The company processes oilseeds, corn, wheat, cocoa and other feedstuffs. Moreover, it engages in the manufacturing, sale, and distribution of products like natural flavor ingredients, flavor systems, natural colors, proteins, emulsifiers, soluble fiber, polyols, hydrocolloids, natural health and nutrition products as well as other specialty food and animal feed ingredients.
Zacks Outlook
ADM Q1 results reflected gains from healthy product demand and strength in the Nutrition segment, while reduced crop supplies have been a drag on performance.
This marked the 11th straight quarter of an earnings surprise and the 10th straight quarter of adjusted operating profit growth. Results gained from solid demand, improved productivity and product innovations.
Persistent growth in the Nutrition segment, driven by significant gains in the Human and Animal Nutrition units, remained key growth drivers. Management expects the nutrition segment operating profit growth of 20% in 2022.
However, dismal margins and rising SG&A costs are deterrents. Higher inflation and issues related to the short crop in South America, stemming from the conflict in Ukraine, remain concerning.
On balance, we rate ADM Outperform for the next 6-12 months with Value, Growth, and Momentum scores of B, C, and B respectively.
Analysts Raise Estimates
The reason that ADM is a Zacks #1 Rank again is purely based on analysts raising their EPS estimates with sufficient magnitude and agreement.
After April earnings, the Zacks Consensus Estimate for this year jumped nearly 20% from $5.15 to $6.13.
But in the last few weeks, analysts have been nudging up estimates more, pushing the consensus to $6.33, representing 22% annual growth.
And the topline now sits at $95.75 billion, for a projected 12.3% advance year-on-year.
Analysts are clearly expecting a strong Q2 from ADM with Jefferies boosting their expectations for the quarter from $1.28 to $1.75.
ADM is expected to report again in late July. Until then, the current market pullback looks like a great opportunity to grab some shares under $80.