A Citi analyst raised his investment rating on Archer Daniels Midland Co. on Wednesday, saying that he expects the agribusiness conglomerate to have a strong year.
Analyst David Driscoll upgraded Archer Daniels Midland's shares to a "Buy" rating from "Neutral." He kept the stock's price target at $45.
Driscoll expects "a big recovery year" for the company, especially in its oilseeds, agricultural and ethanol businesses, he said in a note to clients. A drought in 2012 and 2013 hurt the company's business, but a recent surge in crop production should benefit the company, Driscoll said.
On Tuesday, ADM reported a 26.7 percent decline in its fourth-quarter earnings on costs from its thwarted takeover of Australian grain handler GrainCorp. Excluding those costs and other one-time expenses the company would have earned 95 cents per share, up 58 percent from 60 cents in the same period last year. Revenue fell 3 percent to $24.14 billion from $24.9 billion a year ago.
Analysts polled by FactSet predicted earnings per share of 85 cents per share on revenue of $25.3 billion.
CEO Patricia Woertz said the company's corn business benefited from lower costs while its agricultural services business was impacted by "slow farmer-selling of corn and challenges in international merchandising."
A representative for ADM did not respond to a request for comment on Wednesday's upgrade.
Shares of the Decatur, Ill.-based company slipped 7 cents to $38.16 in morning trading Wednesday. They are up 30 percent from a year ago.
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