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Will Archer-Daniels-Midland Company's (NYSE:ADM) Earnings Grow In The Next 12 Months?

Simply Wall St

Since Archer-Daniels-Midland Company (NYSE:ADM) released its earnings in March 2019, analysts seem fairly confident, as a 9.1% increase in profits is expected in the upcoming year, compared with the past 5-year average growth rate of -2.3%. Presently, with latest-twelve-month earnings at US$1.8b, we should see this growing to US$2.0b by 2020. I will provide a brief commentary around the figures and analyst expectations in the near term. For those keen to understand more about other aspects of the company, you can research its fundamentals here.

View our latest analysis for Archer-Daniels-Midland

How is Archer-Daniels-Midland going to perform in the near future?

The longer term expectations from the 11 analysts of ADM is tilted towards the positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To get an idea of the overall earnings growth trend for ADM, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.

NYSE:ADM Past and Future Earnings, July 31st 2019

From the current net income level of US$1.8b and the final forecast of US$2.0b by 2022, the annual rate of growth for ADM’s earnings is 1.5%. This leads to an EPS of $3.72 in the final year of projections relative to the current EPS of $3.21. By the end of 2022, analysts are expecting earnings to outpace revenue, and margins to expand from the current 2.8% to 2.9%.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For Archer-Daniels-Midland, I've put together three pertinent aspects you should further research:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is Archer-Daniels-Midland worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Archer-Daniels-Midland is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Archer-Daniels-Midland? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.