Jefferies Cuts Price Target on Archer Daniels Midland (ADM), Sets New Earnings Bar

Jefferies is maintaining its Buy rating on shares of Archer Daniels Midland (NYSE: ADM), but is cutting its price target from $40 to $36 following its Q4 results.

The company released its Q4 results with an EPS of $0.58 and an adjusted EPS of $0.70, well below the Streets estimate of $0.83.

The firm notes that on all three of its thesies for upgrading the stock in February, they were proven wrong. It underestimated the favorable impact market-to-market accounting has on the September and December quarters.

An analyst at Jefferies comments, "We missed on the upgrade thesis, but at 1.0X P/BV, ADM shares offer compelling entry point for a global food superpower. ADM's sustainable competitive advantages are enormous, highlighted by the company's global infrastructure, storage, transportation and processing assets. In addition, we note that key spot oilseed and ethanol margins are at or near trough levels."

Jefferies is cutting its FY12 EPS estimate from $3.51 to $3.00, but is raising its revenue estimate from $78.2 billion to $81.2 billion.

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 $28.60 yesterday.

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