Deutsche Bank Lowers Their Price Target on Archer-Daniels-Midland (ADM) to $36
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Deutsche Bank lowers their price target on Archer-Daniels-Midland (NYSE: ADM) from $43 to $36 and reiterates their Hold rating. Deutsche also reduces their F4Q08E (end Jun) EPS to $0.46 from $0.75 and their F2009E EPS to $2.54 from $3.14.
Deutsche said that near-term earnings will be pressured by a shift in global demand trends, combined with geographic positioning weighted to the U.S., as well as high corn costs. Long-term, the firm expects the company to diversify in South America and Europe. However, these investments will take..
The firm said, "Uncertainty about the extent of damage to U.S. corn (and soybean) crops, the need for interim surveys by the USDA, potential penalty-free early release of CRP should lead to continued volatility in crop prices. Higher global wheat production and, thus, reduced global demand for U.S. corn combined with a shorter corn crop will present challenges for ADM in F2009. However, a swapping from soybeans into corn next crop year should provide relief for the processor, in our view."
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