What Do Analysts Recommend for Archer Daniels Midland?
Will Archer Daniels Midland Beat Analysts' Estimates in 1Q16?
Target prices
As of April 26, Archer Daniels Midland’s (ADM) “hold” rating by Wall Street analysts increased from 85% to 92% since we discussed its investment in NFS headquarters.
Now, ~8% gave it a “buy” rating. No analysts rated it a “sell.” The average target price for Archer Daniels Midland fell to $36.60 from $36.67 as of April 26. This target price is 8% lower than the closing price of $39.73 on April 26.
As of April 26, Archer Daniels Midland’s target price fell by ~14% from $42.50 since its disappointing earnings last quarter. Archer Daniels Midland’s peers in the industry such as Bunge (BG), Ingredion (INGR), and B&G Foods (BGS) have average broker target prices of $66.5, $106.17, and $39.25, respectively. These figures imply returns of ~11%, -1.0%, and 18%, respectively, in the next 12 months. Their stock are all part of the First Trust Consumer Staples AlphaDEX Fund (FXG). FXG invests 3.0% of its holdings in Archer Daniels Midland and 1.5% in Bunge. FXG also invests in General Mills. To gain exposure to General Mills, you can invest in the Victory CEMP US EQ Incom Enhanced Volatility Wtd Index ETF (CDC) and the PowerShares S&P 500 High Dividend Low Volatility Portfolio (SPHD). They invest ~3% of their portfolios in General Mills.
Recommendations
As of April 26, Macquarie assigned Archer Daniels Midland a “strong buy” rating with the highest target price of $40. This is 0.68% higher than the closing price of $39.73 on April 26. On April 13, Morningstar downgraded the stock from a “strong buy” to a “hold” rating with no target price. Goldman Sachs and Credit Suisse gave the second-highest target price of $39 to Archer Daniels Midland. This is 1.8% lower than the closing price of $39.73 on April 26. Both rate the stock a “hold.” Others who rated Archer Daniels Midland a “hold” are J.P. Morgan, Stifel, Argus Research Group, Morgan Stanley, BMO Capital Markets, Buckingham Research Group, and Stephens.
Stifel, Morningstar, and Argus Research Corp didn’t provide a target price for Archer Daniels Midland. However, they all rate the stock a “hold.” On April 20, J.P. Morgan increased its target price from $30 to $36 for Archer Daniels Midland. This is 8% lower than the closing price on April 26. It also rated the stock a “hold.” Morgan Stanley and BMO Capital Markets gave the lowest target price of $33 to Archer Daniels Midland.
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