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ADM Rallies 51% YTD: Should You Buy, Hold or Sell the Stock?
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Key Takeaways
ADM shares have surged 50.5% year to date as improving fundamentals strengthen its growth outlook.
ADM's Ag Services & Oilseeds profit jumped 129%, fueled by stronger crushing and biofuel margins.
ADM's Nutrition profit rose 51%, helped by Flavors growth, portfolio actions and Decatur East progress.
Archer Daniels Midland Company (ADM - Free Report) has been one of the stronger performers in the Consumer Staples space this year, reflecting improving investor confidence in the agribusiness giant’s earnings prospects. A constructive biofuels environment, stronger crushing and ethanol margins, improving Nutrition profitability and disciplined execution have helped strengthen the investment case.
ADM has seen its shares rally 50.5% year to date compared with the industry’s growth of 29.7%. The stock has also outperformed the S&P 500 index, which gained 11.6% during the same period, and the Consumer Staples sector, which rose 8.6%.
ADM Stock's Price Performance
Image Source: Zacks Investment Research
ADM’s performance is notably stronger than its competitors, Mission Produce Inc. (AVO - Free Report) and Limoneira Company (LMNR - Free Report) , which grew 15.7% and 18.3%, respectively, and Dole plc (DOLE - Free Report) , which declined 8% year to date.
Closing at $86.55, ADM stock stands almost 2.2% below its 52-week high of $88.46 attained on July 23, 2026. The company is trading above its 50-day and 200-day simple moving averages of $80.96 and $71.56, respectively, indicating positive momentum and suggesting that the stock’s recent uptrend remains intact.
Image Source: Zacks Investment Research
The key question now is whether there is further room to run, or if investors should begin taking profits after the strong move.
Decoding ADM’s Growth Story
ADM’s Ag Services & Oilseeds business was the standout performer in the second quarter. Segment operating profit surged 129% year over year to $867 million. Crushing operating profit increased by roughly $330 million to $363 million, supported by a constructive biofuels margin environment, higher domestic demand following renewable-volume-obligation policy developments and elevated global energy prices. Global crush volumes also increased nearly 5%, reflecting improved manufacturing performance and asset utilization.
Ag Services also benefited from ADM’s ability to leverage its global asset network amid volatile agricultural and trade conditions. Improved South American performance, including the return of the Barcarena export terminal in Brazil to full operations, provided an additional boost. Strong soybean meal demand, driven by healthy global pork and poultry markets, contributed to record U.S. and Brazilian soybean meal exports during the quarter.
Carbohydrate Solutions remained another important growth driver. Segment operating profit increased 22% year over year to $411 million as strong ethanol economics outweighed weakness in liquid sweeteners. ADM also raised its expected 2026 net benefit from the 45Z clean-fuel production credit to approximately $250 million from $150 million previously, reflecting greater visibility into carbon-intensity verification and operational improvements across its ethanol facilities.
ADM continues to invest in areas that can strengthen growth while improving returns on existing assets. The company has identified 10 U.S. crushing plants with potential capacity-unlock opportunities and is initially moving ahead with four facilities. Management indicated that the capital intensity of these brownfield projects is roughly one-fourth of what a greenfield expansion would require, potentially resulting in attractive returns while lowering unit manufacturing costs through greater throughput.
Nutrition Recovery and Innovation Fuel Long-Term Potential
Nutrition is also showing encouraging signs of recovery. Although second-quarter revenues declined 5%, segment operating profit jumped 51% to $172 million. Human Nutrition operating profit increased 51%, primarily driven by Flavors and progress at the Decatur East facility, while Animal Nutrition operating profit advanced 50% following portfolio actions undertaken in 2025.
Flavors remains particularly promising. ADM reported sales growth across all major regions, with a record quarter in Asia Pacific. Management said its Flavors business in Asia Pacific has been growing about 20% year over year, while longer-term Flavors growth is expected to be at least in the mid-single-digit range, with operating profit potentially growing faster due to operating leverage.
ADM is also positioning itself to benefit from the transition toward natural ingredients. Management estimates the U.S. natural-colors opportunity at roughly $1 billion in revenues and believes ADM could eventually generate $80-$100 million in operating profit from this market. The company has already secured customer contracts involving the conversion of artificial red, yellow and orange colors to natural alternatives.
Precision fermentation represents another long-term growth avenue. ADM is developing capabilities that can leverage its existing fermentation assets and dextrose production. Current projects include partnerships involving egg-replacement proteins and lamb alternatives for pet food, while the company also plans to launch at least one natural color produced through precision fermentation.
How Have Estimates Shaped Up for ADM?
The Zacks Consensus Estimate for ADM’s fiscal 2026 and 2027 EPS remained unchanged in the last 30 days. For fiscal 2026, the Zacks Consensus Estimate for ADM’s sales implies year-over-year growth of 6.6%, whereas EPS implies a rise of 52.2%. The consensus mark for fiscal 2027 sales and earnings suggests year-over-year growth of 1.4% and 3.5%, respectively.
Image Source: Zacks Investment Research
ADM’s Valuation
ADM is currently trading at a forward 12-month P/E multiple of 15.96X, above the industry average of 15.58X.
At a 15.96X P/E, ADM is trading at a valuation higher than its competitors, such as Mission Produce and Limoneira, while it commands a higher valuation than Dole. Mission Produce, Limoneira and Dole have forward 12-month P/E ratios of 19.34X, 48.66X and 9.58X, respectively.
Image Source: Zacks Investment Research
How to Play ADM Stock: Buy, Hold or Take Profits?
ADM’s strong year-to-date performance is backed by improving fundamentals across its key businesses. Robust crushing and ethanol margins, favorable biofuel economics, higher global crush volumes and the increased expected benefit from the 45Z clean-fuel production credit are supporting growth in Ag Services & Oilseeds and Carbohydrate Solutions. Meanwhile, Nutrition is showing encouraging signs of recovery, aided by strength in Flavors, portfolio actions and emerging opportunities in natural colors and precision fermentation. Cost-efficient brownfield capacity expansions could further improve asset utilization and returns. With fiscal 2026 earnings expected to increase sharply and the stock sporting a Zacks Rank #1 (Strong Buy), ADM appears well positioned for further upside, making it an attractive option for investors seeking exposure to improving agribusiness fundamentals. You can see the complete list of today’s Zacks #1 Rank stocks here.
View the Zacks #1 Rank List
Image: Bigstock
ADM Rallies 51% YTD: Should You Buy, Hold or Sell the Stock?
Key Takeaways
Archer Daniels Midland Company (ADM - Free Report) has been one of the stronger performers in the Consumer Staples space this year, reflecting improving investor confidence in the agribusiness giant’s earnings prospects. A constructive biofuels environment, stronger crushing and ethanol margins, improving Nutrition profitability and disciplined execution have helped strengthen the investment case.
ADM has seen its shares rally 50.5% year to date compared with the industry’s growth of 29.7%. The stock has also outperformed the S&P 500 index, which gained 11.6% during the same period, and the Consumer Staples sector, which rose 8.6%.
ADM Stock's Price Performance
Image Source: Zacks Investment Research
ADM’s performance is notably stronger than its competitors, Mission Produce Inc. (AVO - Free Report) and Limoneira Company (LMNR - Free Report) , which grew 15.7% and 18.3%, respectively, and Dole plc (DOLE - Free Report) , which declined 8% year to date.
Closing at $86.55, ADM stock stands almost 2.2% below its 52-week high of $88.46 attained on July 23, 2026. The company is trading above its 50-day and 200-day simple moving averages of $80.96 and $71.56, respectively, indicating positive momentum and suggesting that the stock’s recent uptrend remains intact.
Image Source: Zacks Investment Research
The key question now is whether there is further room to run, or if investors should begin taking profits after the strong move.
Decoding ADM’s Growth Story
ADM’s Ag Services & Oilseeds business was the standout performer in the second quarter. Segment operating profit surged 129% year over year to $867 million. Crushing operating profit increased by roughly $330 million to $363 million, supported by a constructive biofuels margin environment, higher domestic demand following renewable-volume-obligation policy developments and elevated global energy prices. Global crush volumes also increased nearly 5%, reflecting improved manufacturing performance and asset utilization.
Ag Services also benefited from ADM’s ability to leverage its global asset network amid volatile agricultural and trade conditions. Improved South American performance, including the return of the Barcarena export terminal in Brazil to full operations, provided an additional boost. Strong soybean meal demand, driven by healthy global pork and poultry markets, contributed to record U.S. and Brazilian soybean meal exports during the quarter.
Carbohydrate Solutions remained another important growth driver. Segment operating profit increased 22% year over year to $411 million as strong ethanol economics outweighed weakness in liquid sweeteners. ADM also raised its expected 2026 net benefit from the 45Z clean-fuel production credit to approximately $250 million from $150 million previously, reflecting greater visibility into carbon-intensity verification and operational improvements across its ethanol facilities.
ADM continues to invest in areas that can strengthen growth while improving returns on existing assets. The company has identified 10 U.S. crushing plants with potential capacity-unlock opportunities and is initially moving ahead with four facilities. Management indicated that the capital intensity of these brownfield projects is roughly one-fourth of what a greenfield expansion would require, potentially resulting in attractive returns while lowering unit manufacturing costs through greater throughput.
Nutrition Recovery and Innovation Fuel Long-Term Potential
Nutrition is also showing encouraging signs of recovery. Although second-quarter revenues declined 5%, segment operating profit jumped 51% to $172 million. Human Nutrition operating profit increased 51%, primarily driven by Flavors and progress at the Decatur East facility, while Animal Nutrition operating profit advanced 50% following portfolio actions undertaken in 2025.
Flavors remains particularly promising. ADM reported sales growth across all major regions, with a record quarter in Asia Pacific. Management said its Flavors business in Asia Pacific has been growing about 20% year over year, while longer-term Flavors growth is expected to be at least in the mid-single-digit range, with operating profit potentially growing faster due to operating leverage.
ADM is also positioning itself to benefit from the transition toward natural ingredients. Management estimates the U.S. natural-colors opportunity at roughly $1 billion in revenues and believes ADM could eventually generate $80-$100 million in operating profit from this market. The company has already secured customer contracts involving the conversion of artificial red, yellow and orange colors to natural alternatives.
Precision fermentation represents another long-term growth avenue. ADM is developing capabilities that can leverage its existing fermentation assets and dextrose production. Current projects include partnerships involving egg-replacement proteins and lamb alternatives for pet food, while the company also plans to launch at least one natural color produced through precision fermentation.
How Have Estimates Shaped Up for ADM?
The Zacks Consensus Estimate for ADM’s fiscal 2026 and 2027 EPS remained unchanged in the last 30 days. For fiscal 2026, the Zacks Consensus Estimate for ADM’s sales implies year-over-year growth of 6.6%, whereas EPS implies a rise of 52.2%. The consensus mark for fiscal 2027 sales and earnings suggests year-over-year growth of 1.4% and 3.5%, respectively.
Image Source: Zacks Investment Research
ADM’s Valuation
ADM is currently trading at a forward 12-month P/E multiple of 15.96X, above the industry average of 15.58X.
At a 15.96X P/E, ADM is trading at a valuation higher than its competitors, such as Mission Produce and Limoneira, while it commands a higher valuation than Dole. Mission Produce, Limoneira and Dole have forward 12-month P/E ratios of 19.34X, 48.66X and 9.58X, respectively.
Image Source: Zacks Investment Research
How to Play ADM Stock: Buy, Hold or Take Profits?
ADM’s strong year-to-date performance is backed by improving fundamentals across its key businesses. Robust crushing and ethanol margins, favorable biofuel economics, higher global crush volumes and the increased expected benefit from the 45Z clean-fuel production credit are supporting growth in Ag Services & Oilseeds and Carbohydrate Solutions. Meanwhile, Nutrition is showing encouraging signs of recovery, aided by strength in Flavors, portfolio actions and emerging opportunities in natural colors and precision fermentation. Cost-efficient brownfield capacity expansions could further improve asset utilization and returns. With fiscal 2026 earnings expected to increase sharply and the stock sporting a Zacks Rank #1 (Strong Buy), ADM appears well positioned for further upside, making it an attractive option for investors seeking exposure to improving agribusiness fundamentals. You can see the complete list of today’s Zacks #1 Rank stocks here.