Citi Downgrades Archer-Daniels-Midland (ADM) to Sell; Adds Stock to Top Picks Sell List

April 7, 2009 8:38 AM EDT

Citi downgrades Archer-Daniels-Midland Company (NYSE: ADM) from Hold to Sell. Adds stock to Top Picks List. Price target $25.

Citi analyst says, "We recently traveled to Decatur, Illinois to visit with management from Archer Daniels Midland. The 50,000 foot view of the situation at ADM's major businesses reveals deterioration. In some cases, the deterioration has been extremely rapid-agricultural services and oilseed processing-while in other cases the deterioration has been a bit more moderate such as in the firm's wheat and cocoa processing division...Overall, we see only High Fructose Corn Syrup (HFCS) as a business that is likely to see year-over-year profits increases in C2009 versus C2008. However, even the sweetener business HFCS volume are likely to be down anywhere from -1% to -5%. Thus, even in the "strongest business" the situation has experienced some difficulties...Moreover, we see an even larger issue with F2010 consensus estimates of $2.87, which appear too bullish given what we currently see occurring in the global agricultural markets."

Archer Daniels Midland Company is engaged in procuring, transporting, storing, processing, and merchandising agricultural commodities and products.

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