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Archer Daniels Midland (ADM) Dips More Than Broader Markets: What You Should Know

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Archer Daniels Midland (ADM) closed at $71.70 in the latest trading session, marking a -1.36% move from the prior day. This move lagged the S&P 500's daily loss of 0.3%. Meanwhile, the Dow lost 0.46%, and the Nasdaq, a tech-heavy index, lost 0.34%.

Prior to today's trading, shares of the agribusiness giant had lost 11.66% over the past month. This has lagged the Consumer Staples sector's gain of 3.21% and the S&P 500's gain of 1.51% in that time.

Investors will be hoping for strength from Archer Daniels Midland as it approaches its next earnings release, which is expected to be July 26, 2022. On that day, Archer Daniels Midland is projected to report earnings of $1.74 per share, which would represent year-over-year growth of 30.83%. Meanwhile, our latest consensus estimate is calling for revenue of $25.27 billion, up 10.22% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $6.31 per share and revenue of $95.83 billion, which would represent changes of +21.58% and +12.41%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Archer Daniels Midland. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.32% lower. Archer Daniels Midland currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, Archer Daniels Midland is holding a Forward P/E ratio of 11.53. Its industry sports an average Forward P/E of 20.4, so we one might conclude that Archer Daniels Midland is trading at a discount comparatively.

Investors should also note that ADM has a PEG ratio of 1.98 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Agriculture - Operations stocks are, on average, holding a PEG ratio of 2.18 based on yesterday's closing prices.

The Agriculture - Operations industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 52, which puts it in the top 21% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow ADM in the coming trading sessions, be sure to utilize Zacks.com.


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