Now trading at a price of $75.08, Archer-Daniels-Midland Company has moved 1.8% so far today.
Archer-Daniels-Midland Company returned losses of -21.0% last year, with its stock price reaching a high of $96.16 and a low of $69.31. Over the same period, the stock underperformed the S&P 500 index by -36.4%. As of April 2023, the company's 50-day average price was $73.23. 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 2.4% dividend yield over the last 12 months, but this may not be sustainable seen that the company has a choppy cash flow record.
Growing Revenues With Increasing Reinvestment in the Business:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $64,341 | $64,656 | $64,355 | $85,249 | $101,556 | $96,896 |
| Revenue Growth | n/a | 0.49% | -0.47% | 32.47% | 19.13% | -4.59% |
| Operating Margins | 3% | 2% | 3% | 4% | 5% | 5% |
| Net Margins | 3% | 2% | 3% | 3% | 4% | 4% |
| Net Income (MM) | $1,815 | $1,379 | $1,782 | $2,735 | $4,365 | $3,948 |
| Net Interest Expense (MM) | $364 | $402 | $339 | $265 | $396 | $616 |
| Depreciation & Amort. (MM) | $941 | $993 | $976 | $996 | $1,028 | $1,036 |
| Earnings Per Share | $3.19 | $2.44 | $3.15 | $4.79 | $7.71 | $7.18 |
| EPS Growth | n/a | -23.51% | 29.1% | 52.06% | 60.96% | -6.87% |
| Diluted Shares (MM) | 567 | 565 | 565 | 566 | 563 | 501 |
| Free Cash Flow (MM) | -$5,626 | -$6,280 | -$3,209 | $5,426 | $2,159 | $488 |
| Capital Expenditures (MM) | $842 | $828 | $823 | $1,169 | $1,319 | $1,533 |
| Current Ratio | 1.75 | 1.55 | 1.5 | 1.45 | 1.46 | 1.69 |
| Total Debt (MM) | $12,627 | $13,299 | $15,583 | $17,679 | $18,226 | $15,834 |
| Net Debt / EBITDA | 3.54 | 4.82 | 5.22 | 3.88 | 2.75 | 2.47 |
The Market May Be Undervaluing Archer-Daniels-Midland Company's Earnings and Assets:
Archer-Daniels-Midland Company has a trailing twelve month P/E ratio of 10.2, compared to an average of 21.21 for the Consumer Staples sector. Based on its EPS guidance of $6.58, the company has a forward P/E ratio of 11.1. According to the 10.9% compound average growth rate of Archer-Daniels-Midland Company's historical and projected earnings per share, the company's PEG ratio is 0.93. 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 8.7%. On this basis, the company's PEG ratio is 1.17. This implies that the shares are fairly valued. Additionally, the market is possibly undervaluing Archer-Daniels-Midland Company in terms of its equity because its P/B ratio is 1.59 whereas the sector average is 4.12.
Archer-Daniels-Midland Company Has an Analyst Consensus of Some Upside Potential:
The 13 analysts following Archer-Daniels-Midland Company have set target prices ranging from $75.0 to $116.0 per share, for an average of $92.23 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 some 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 80.9% of the company's shares, and the insider ownership rate stands at 0.73%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 11% stake in the company is worth $4,568,381,083.
