Archer-Daniels-Midland Company logged a 0.9% change during today's afternoon session, and is now trading at a price of $71.92 per share.
Archer-Daniels-Midland Company returned losses of -20.4% last year, with its stock price reaching a high of $98.28 and a low of $69.92. Over the same period, the stock underperformed the S&P 500 index by -23.0%. As of April 2023, the company's 50-day average price was $76.77. Archer-Daniels-Midland Company procures, transports, stores, processes, and merchandises agricultural commodities, products, and ingredients in the United States, Switzerland, the Cayman Islands, Brazil, Mexico, Canada, the United Kingdom, and internationally. Based in Chicago, IL, the large-cap Consumer Staples company has 40,360 full time employees. Archer-Daniels-Midland Company has returned a 2.3% dividend yield over the last 12 months, but this may not be sustainable seen that the company has a choppy cash flow record.
An Exceptionally Strong Balance Sheet:
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (MM) | $64,656 | $64,355 | $85,249 | $101,848 |
| Gross Margins | 6.4% | 6.9% | 7.0% | 7.4% |
| Operating Margins | 2.6% | 2.7% | 3.5% | 4.1% |
| Net Margins | 2.13% | 2.75% | 3.18% | 4.26% |
| Net Income (MM) | $1,379 | $1,772 | $2,709 | $4,340 |
| Net Interest Income | -$210,000 | -$251,000 | -$169,000 | -$103,000 |
| Depreciation & Amort. | -$993,000 | -$976,000 | -$996,000 | -$1,028,000 |
| Earnings Per Share | $2.44 | $3.15 | $4.79 | $7.97 |
| EPS Growth | n/a | 29.1% | 52.06% | 66.39% |
| Diluted Shares (MM) | 565 | 565 | 566 | 545 |
| Free Cash Flow (MM) | -$6,280 | -$3,209 | $5,426 | $2,159 |
| Capital Expenditures (MM) | -$828 | -$823 | -$1,169 | -$1,319 |
| Net Current Assets (MM) | -$3,367 | $13,727 | -$1,460 | $252 |
| Current Ratio | 1.55 | 1.5 | 11.99 | 25.18 |
| Long Term Debt (MM) | $7,672 | $7,885 | $8,581 | $8,677 |
| Net Debt / EBITDA | 2.95 | 3.07 | 1.93 | 1.28 |
Archer-Daniels-Midland Company has growing revenues and increasing reinvestment in the business and exceptional EPS growth. Additionally, the company's financial statements display an excellent current ratio and healthy leverage. However, the firm suffers from slimmer gross margins than its peers and an unconvincing cash flow history. Finally, we note that Archer-Daniels-Midland Company has weak operating margings with a positive growth rate.
Archer-Daniels-Midland Company's Earnings and Assets May Be Undervalued:
Archer-Daniels-Midland Company has a trailing twelve month P/E ratio of 9.6, compared to an average of 24.36 for the Consumer Staples sector. Based on its EPS guidance of $6.6, the company has a forward P/E ratio of 11.6. According to the 22.0% compound average growth rate of Archer-Daniels-Midland Company's historical and projected earnings per share, the company's PEG ratio is 0.44. Taking the weighted average of the company's EPS CAGR and the broader market's 5-year projected EPS growth rate, we obtain a normalized growth rate of 10.4%. On this basis, the company's PEG ratio is 0.93. This suggests that its shares are undervalued. Additionally, the market is possibly undervaluing Archer-Daniels-Midland Company in terms of its equity because its P/B ratio is 1.58 whereas the sector average is 4.29. The company's shares are currently trading 4.8% below their Graham number.
Archer-Daniels-Midland Company Has an Average Rating of Buy:
The 12 analysts following Archer-Daniels-Midland Company have set target prices ranging from $82.0 to $117.0 per share, for an average of $96.74 with a buy rating. As of April 2023, the company is trading -20.6% away from its average target price, indicating that there is an analyst consensus of strong upside potential.
Archer-Daniels-Midland Company has a very low short interest because 1.1% of the company's shares are sold short. Institutions own 83.4% of the company's shares, and the insider ownership rate stands at 0.67%, suggesting a small amount of insider investors. The largest shareholder is the Vanguard Group, Inc., whose 11% stake in the company is worth $4,500,421,955.
