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Archer Daniels Midland (ADM) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research
Sprouts Farmers (SFM) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

Archer Daniels Midland (ADM) closed the most recent trading day at $43.27, moving +0.84% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.7%. Elsewhere, the Dow gained 0.58%, while the tech-heavy Nasdaq added 0.69%.

Prior to today's trading, shares of the agribusiness giant had gained 1.35% over the past month. This has outpaced the Consumer Staples sector's gain of 0.26% and lagged the S&P 500's gain of 1.95% in that time.

Wall Street will be looking for positivity from ADM as it approaches its next earnings report date. On that day, ADM is projected to report earnings of $0.79 per share, which would represent year-over-year growth of 16.18%. Our most recent consensus estimate is calling for quarterly revenue of $16.70 billion, up 7.59% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.54 per share and revenue of $67.85 billion, which would represent changes of +1.14% and +5.45%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for ADM. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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. The Zacks Consensus EPS estimate remained stagnant within the past month. ADM currently has a Zacks Rank of #3 (Hold).

Investors should also note ADM's current valuation metrics, including its Forward P/E ratio of 12.11. This represents a discount compared to its industry's average Forward P/E of 22.44.

The Agriculture - Operations industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 198, which puts it in the bottom 23% 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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