Jefferies Upgrades Archer Daniels Midland (ADM) to Buy, Price Target $44

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Jefferies upgraded shares of Archer Daniels Midland (NYSE: ADM) to a Buy rating from their previous rating of Hold as the company continues to increase their ability to drive margin expansion. The company's 2Q11 Ag Service EBIT margin doubled to 4.0% from 2.0% which was due to delivering record export volumes out of the U.S. The firm reports that ADM will be able to keep their Corn Processing margins above 10% with the help of improved HFCS pricing and volumes, rapidly growing ethanol exports driven by the U.S.'s current status as the world's low cost provider, and continued lysine margin strength driven by the increased use of DDGS. Jefferies is raising their FY11 and FY12 EPS estimates on the company to $3.50 and $3.70 from $3.44 and $3.58, they also increased their price target by $8 to $44.

For more ratings news on Archer Daniels Midland click here and for the rating history of Archer Daniels Midland click here.

Shares of Archer Daniels Midland closed at $36.46 yesterday, with a 52 week range of $24.22-$36.73.

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