10Y annualized return is
negative
at -1.0% per year
ADM has met or exceeded earnings expectations in
some
recent quarters (6/10)
Attractive Price-to-Earnings Ratio
Low Price-to-Sales Ratio
Favorable Price-to-Book Ratio
Decent Return on Equity
Strong Operating Cash Flow
Strong Liquidity Ratios
Manageable Debt Levels
Strong Financial Performance
Commitment to Shareholder Returns
Operational Improvements and Cost Management
Strategic Focus on Growth and Simplification
Positive Expectations for 2025
Moderate EV/EBITDA Ratio
Low Profit Margins
Moderate Interest Coverage
Challenges in Specific Segments
Dependence on External Conditions
Market Headwinds Impacting Short-Term Outlook
Uncertain Regulatory Environment
Overall, ADM demonstrates strong business quality through its solid financial performance, commitment to shareholder returns, and focus on operational improvements. However, challenges in specific segments and dependence on external conditions present risks. Future prospects appear promising with a strategic focus on growth and simplification, but short-term headwinds and regulatory uncertainties could impact performance.
Analysis Date: February 4, 2025
Last Updated: April 12, 2025
Past performance does not guarantee future results. The data presented is indicative and may not be updated in real-time.
Archer-Daniels-Midland Company (ADM) is a big company that works with food and farming products. They buy, store, and move crops like corn and wheat, and turn these into different food ingredients, like oils and sweeteners. ADM also makes animal feed and provides ingredients for energy and industrial products. Basically, they help get food from farms to our tables and support food production in many ways.
Core Products
Business Type
Business to Business
Competitive Advantages
Key Business Risks
Latest News
ADM (ADM) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the ke...
In the closing of the recent trading day, Archer Daniels Midland (ADM) stood at $46.13, denoting a +0.13% change from the preceding trading day.
Global grain merchant Archer-Daniels-Midland has begun shutting down domestic trading operations in China and laying off staff within its largest busi...
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Benjamin Graham's value investing approach focuses on finding stocks with a significant margin of safety between their intrinsic value and market price.
Intrinsic Value
Estimated fair value based on Graham's formula
$134.99
Current Market Price: $43.52
IV/P Ratio: 3.10x (>1.0 indicates undervalued)
Margin of Safety
Gap between intrinsic value and market price
68.0%
Graham recommended a minimum of 20-30% margin of safety
Higher values indicate a greater potential discount to fair value
Graham Criteria Checklist
Benjamin Graham's value investing checklist for ADM
Positive earnings (5+ years)
Dividend history (5+ years)
P/E ratio ≤ 20 (11.50)
P/B ratio ≤ 1.5 (0.93)
Current ratio ≥ 2.0 (5.44x)
Long-term debt < Net current assets (0.98x)
Margin of safety (68.0%)
ADM meets all Graham criteria
Trailing Twelve Months (TTM) values provide a view of the company's performance over the last year.
Profitability metrics measure a company's ability to generate earnings relative to its revenue, operating costs, and other relevant metrics. Higher values generally indicate better performance.
Return on Equity (ROE)
Measures how efficiently a company uses its equity to generate profits
8.04%
Higher values indicate better returns for shareholders
TTM (as of 2025-04-30)
Gross Profit Margin
Percentage of revenue retained after accounting for cost of goods sold
6.76%
Higher values indicate better efficiency in production
TTM (as of 2025-04-30)
Net Profit Margin
Percentage of revenue retained after accounting for all expenses
2.10%
Higher values indicate better overall profitability
TTM (as of 2025-04-30)
A return on equity (ROE) of 8.04% is a positive indicator of how effectively the company is using shareholders' equity to generate profit.
With operating cash flow per share at 5.74, ADM demonstrates strong cash management capabilities, which is critical for sustaining operations and funding growth.
The net profit margin of 2.10% and gross profit margin of 6.93% suggest that the company may face challenges in converting revenue to profit compared to industry peers.
Financial health metrics assess a company's ability to meet its financial obligations and its overall financial stability.
Debt to Equity Ratio
Total debt divided by total equity
0.45x
Lower values indicate less financial leverage and risk
Less than 1.0 is conservative, 1.0-2.0 is moderate, >2.0 indicates high risk
Q4 2024
Current Ratio
Current assets divided by current liabilities
5.44x
Higher values indicate better short-term liquidity
Less than 1.0 is concerning, 1.0-2.0 is adequate, greater than 2.0 is good
Q4 2024
With a current ratio of 5.44 and a quick ratio of 5.44, ADM shows excellent liquidity, indicating that it can easily cover its short-term liabilities.
A debt-to-equity ratio of 0.46 reflects a conservative leverage position, which reduces financial risk and enhances stability.
The interest coverage ratio of 3.19 indicates that while ADM can cover its interest obligations, it may not have substantial room for error in times of financial distress.
Meeting Expectations
Higher values indicate better execution and credibility
Recent Results
EPS
ADM reported fourth quarter adjusted earnings per share of $1.14 and a full-year adjusted earnings per share of $4.74, aligning with guidance. Total segment operating profit was $1.1 billion for the fourth quarter and $4.2 billion for the full-year, demonstrating a solid financial foundation.
ADM has a strong history of returning cash to shareholders, with the announcement of a quarterly dividend increase marking the 93rd consecutive year of uninterrupted dividends.
The company has focused on improving operations across its network, achieving a more than 35% reduction in process safety incidents and plans for $500 million to $750 million in cost savings over the next three to five years.
The Ag Services and Oilseeds (AS&O) segment faced significant headwinds, with operating profit down 32% year-over-year. Issues such as biofuel and trade policy uncertainty, high manufacturing costs, and lower margins due to ample global supplies have negatively impacted performance.
The company faces uncertainties related to external market conditions, including trade policies and biofuel demand, which pose risks to operational performance and profitability.
ADM is prioritizing strategic simplification and growth opportunities, with a pipeline of approximately $2 billion in potential portfolio opportunities and targeted investments in innovation and operational efficiency.
The company anticipates improved margins in the second half of 2025 as clarity on biofuel policies is expected to drive demand for crop-based vegetable oil, alongside anticipated improvements in the livestock sector.
For the first quarter of 2025, segment operating profits are expected to be down approximately 50% compared to the prior year, particularly in the AS&O segment due to lower crush margins and biodiesel margins.
The ongoing uncertainty regarding trade policies and regulatory changes, particularly concerning biofuels, may hinder growth and affect planning for the future.