Barclays Upgrades Archer Daniels Midland (ADM) to Equalweight

Barclays analyst Benjamin Theuer upgraded Archer Daniels Midland (NYSE: ADM) from Underweight to Equalweight with a price target of $61.00 (from $50.00).

The analyst comments: "We upgrade ADM to EW and lift our PT to $61 (from UW and prior PT $50) due to improvements in Nutrition and a recovering crush outlook. After its extended downtime, the Decatur East plant (Nutrition) is back online and ramping to planned run rates. The shutdown created a ~$20-$25mn headwind per quarter, of which should be off its costs by 4Q. At the same time, the RVO proposal alongside a domestic focus on 45Z will lift margins in 4Q and 2026+; we therefore see limited downside from this point but believe the market is sitting at reasonable expectations for ADM. Moreover, ADM affirmed that it has successfully remediated the material weakness in internal controls for segment disclosures related to reporting, pricing and measurement with refined intersegment policies, measurement controls, and training. Management pointed out the main risk to the guide - in that if crush or replacement margin does not lift up as expected, EPS could be impacted ~15 cents. Additionally, ethanol will still be softer YoY. Finally, ADM acknowledged signs of consumer stress and cautious spending behavior, particularly in snacks and sweets."

For an analyst ratings summary and ratings history on Archer Daniels Midland click here. For more ratings news on Archer Daniels Midland click here.

Shares of Archer Daniels Midland closed at $57.62 yesterday.

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