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Archer Daniels Midland (ADM) Gains But Lags Market: What You Should Know

Zacks Equity Research
Updated
HPT vs. HCP: Which Stock Is the Better Value Option?

Archer Daniels Midland (ADM) closed at $48.83 in the latest trading session, marking a +0.33% move from the prior day. The stock lagged the S&P 500's daily gain of 1.42%. At the same time, the Dow added 1.15%, and the tech-heavy Nasdaq gained 2.29%.

Prior to today's trading, shares of the agribusiness giant had lost 2.66% over the past month. This has was narrower than the Consumer Staples sector's loss of 4.51% and the S&P 500's loss of 5.36% in that time.

ADM will be looking to display strength as it nears its next earnings release, which is expected to be November 6, 2018. The company is expected to report EPS of $0.78, up 73.33% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $15.64 billion, up 5.52% from the prior-year quarter.

ADM's full-year Zacks Consensus Estimates are calling for earnings of $3.44 per share and revenue of $64.40 billion. These results would represent year-over-year changes of +41.56% and +5.87%, respectively.

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It is also important to note the recent changes to analyst estimates for ADM. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.07% higher. ADM is currently sporting a Zacks Rank of #1 (Strong Buy).

Digging into valuation, ADM currently has a Forward P/E ratio of 14.17. For comparison, its industry has an average Forward P/E of 23.45, which means ADM is trading at a discount to the group.

The Agriculture - Operations industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 107, which puts it in the top 42% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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