Archer Daniels Midland (ADM) Gains But Lags Market: What You Should Know
In the latest trading session, Archer Daniels Midland (ADM) closed at $83.98, marking a +0.24% move from the previous day. This move lagged the S&P 500's daily gain of 1.17%. Meanwhile, the Dow gained 0.8%, and the Nasdaq, a tech-heavy index, added 0.18%.
Prior to today's trading, shares of the agribusiness giant had gained 9.3% over the past month. This has outpaced the Consumer Staples sector's loss of 4.53% and the S&P 500's gain of 0.88% in that time.
Wall Street will be looking for positivity from Archer Daniels Midland as it approaches its next earnings report date. The company is expected to report EPS of $1.34, down 3.6% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $20.45 billion, up 8.26% from the year-ago period.
Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.15 per share and revenue of $88.26 billion. These totals would mark changes of -0.77% and +3.53%, respectively, from last year.
It is also important to note the recent changes to analyst estimates for Archer Daniels Midland. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.
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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.11% higher within the past month. Archer Daniels Midland currently has a Zacks Rank of #1 (Strong Buy).
Looking at its valuation, Archer Daniels Midland is holding a Forward P/E ratio of 16.28. This represents a discount compared to its industry's average Forward P/E of 22.33.
Investors should also note that ADM has a PEG ratio of 9.2 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Agriculture - Operations was holding an average PEG ratio of 1.67 at yesterday's closing price.
The Agriculture - Operations industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 86, which puts it in the top 34% 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.
You can find more information on all of these metrics, and much more, on Zacks.com.
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