Understanding the Basics of ADM Stocks

Now trading at a price of $84.79, Archer-Daniels-Midland Company has moved -0.2% so far today.

Over the last year, Archer-Daniels-Midland Company logged a 5.0% change, 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 -5.0%. As of April 2023, the company's 50-day average price was $76.63. 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 not offered a dividend during the last year.

The Company Has a Positive Net Current Asset Value:

2019-12-31 2021-02-18 2022-02-17 2023-02-14
Revenue (MM) $64,656 $64,355 $85,249 $101,556
Gross Margins 6.4% 6.9% 7.0% 7.4%
Operating Margins 2.6% 2.7% 3.5% 4.2%
Net Margins 2.13% 2.75% 3.18% 4.27%
Net Income (MM) $1,379 $1,772 $2,709 $4,340
Net Interest Expense (MM) -$402 -$228 -$169 -$103
Depreciation & Amort. (MM) -$993 -$976 -$996 -$1,028
Earnings Per Share $2.44 $3.15 $4.79 $7.5
EPS Growth n/a 29.1% 52.06% 56.58%
Diluted Shares (MM) 565 563 566 545
Free Cash Flow (MM) -$4,917 -$2,291 $7,519 $4,666
Capital Expenditures (MM) -$535 -$95 -$924 -$1,188
Net Current Assets (MM) -$3,367 -$2,337 -$1,460 $252
Current Ratio 1.55 1.5 1.45 1.46
Long Term Debt (MM) $7,672 $7,885 $8,011 $7,735
Net Debt / EBITDA 3.13 3.22 2.61 1.77

Archer-Daniels-Midland Company has growing revenues and increasing reinvestment in the business, exceptional EPS growth, and healthy leverage. However, the firm has slimmer gross margins than its peers. Finally, we note that Archer-Daniels-Midland Company has weak operating margings with a positive growth rate, irregular cash flows, and just enough current assets to cover current liabilities.

A Lower P/B Ratio Than Its Sector Average but Trades Above Its Graham Number:

Archer-Daniels-Midland Company has a trailing twelve month P/E ratio of 10.2, compared to an average of 24.36 for the Consumer Staples sector. Based on its EPS guidance of $209.46, the company has a forward P/E ratio of 0.4. According to the 143.6% compound average growth rate of Archer-Daniels-Midland Company's historical and projected earnings per share, the company's PEG ratio is 0.07. 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 11.7%. On this basis, the company's PEG ratio is 0.87. 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 1.91 whereas the sector average is 4.29. The company's shares are currently trading 26.9% above their Graham number.

There's an Analyst Consensus of Strong Upside Potential for Archer-Daniels-Midland Company:

The 14 analysts following Archer-Daniels-Midland Company have set target prices ranging from $2668.91 to $3673.67 per share, for an average of $3105.04 with a buy rating. As of April 2023, the company is trading -97.5% 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 1.3% of the company's shares are sold short. Institutions own 81.0% 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 Vanguard Group Inc, whose 12% stake in the company is worth $5,305,398,199.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.