(ADM) Archer Daniels Midland – Bear of the Day

We recently downgraded our recommendation on Archer Daniels Midland (ADM) to Underperform following a lower-than-expected fourth-quarter 2011 results. ADM’s quarterly earnings of $0.58 per share missed the Zacks Consensus Estimate of $0.84 and dropped almost 16% from the prior-year quarter, primarily due to a higher income tax rate.

Although, ADM is expanding its global footprint into key agriculture regions through acquisitions and joint ventures, the resourcing of commodities and stringent external finance may pose a threat to its operating performance. Moreover, intense competition and adverse currency fluctuations may undermine the company’s long-term initiatives and dampen the financials of the company.

Our long-term Underperform recommendation on the stock indicates that it would perform below the broader market. Our target price of $25.00, 7.8x 2012 EPS, reflects this view.

ARCHER DANIELS (ADM): Free Stock Analysis Report

Zacks Investment Research

About vitalstocks

This is a sample profile field. Vitalstocks is the operating company for Stockbloghub. This will place the picture of the author or company in the profile. Here is another extra line of information.


Powered by Facebook Comments

Similar Posts: | | Consumer Goods | Farm Products

RSS feeds: ADM | Archer-Daniels-Midland Company | Consumer Goods | Farm Products |

Other Posts by | RSS Feed for this author