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Archer-Daniels Midland Co ADM

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Morningstar’s Analysis

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Raising ADM FVE to $53 on Improved Near-Term Outlook; Shares Overvalued

Seth Goldstein, CFA Senior Equity Analyst

Analyst Note

| Seth Goldstein, CFA |

Archer Daniels Midland reported solid third-quarter results as adjusted segment operating profit was up 18% versus the prior-year quarter. The growth was driven by higher agricultural services and oilseeds and nutrition results, partially offset by lower sweeteners and starches profits. We have increased our near-term outlook for the ag services and oilseeds business as we expect favorable grain merchandising conditions will remain in place throughout much of 2022. Our long-term outlook is intact. Having updated our model to reflect these changes, we've increased our fair value estimate to $53 per share from $50. Our no-moat rating is unchanged.

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Company Profile

Business Description

Archer Daniels Midland is a major processor of oilseeds, corn, wheat, and other agricultural commodities. Additionally, the company owns an extensive network of logistical assets to store and transport crops around the globe. ADM also runs a nutrition business that focuses on both human and animal ingredients.

77 West Wacker Drive, Suite 4600
Chicago, IL, 60601
T +1 312 634-8100
Sector Consumer Defensive
Industry Farm Products
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 30, 2020
Stock Type Slow Growth
Employees 39,088