Archer Daniels Midland Company
) touched a new 52-week high of $38.59 on Monday, August 12, and
eventually closed trade at $38.56. The stock has been performing
well based on the company's robust quarterly results and
impressive inorganic growth initiatives. This specialty retailer
has amassed a year-to-date return of 36.1%.
The average volume of shares traded over the last 3 months was
approximately 3,520K. Moreover, the company currently trades at a
forward P/E of 16.7x, in line with the peer group average. The
last traded price is 11.0% above the Zacks Consensus average
analyst price target of $34.75. Additionally, the company's
long-term estimated EPS growth rate is 8.7%.
Investors are optimistic about this Zacks Rank #3 (Hold) stock as
it reported adjusted earnings of 46 cents per share for
second-quarter 2013, that handily surpassed the Zacks Consensus
Estimate of 41 cents and surged over 21% from the year-ago
comparable quarter's adjusted earnings of 38 cents. The company's
earnings primarily improved due to robust operating profit at the
Corn Processing segment, partially offset by weak performance at
its Agricultural Services segment.
We believe that Archer Daniels' consistent focus on enhancing its
processing capabilities and global footprint through strategic
acquisitions and joint ventures bode well for future growth. We
remain optimistic about the company's recent attempt to acquire
GrainCorp, which will not only enhance its financial position but
also help in gaining market share in emerging economies.
Nevertheless, we remain slightly anxious about the stock as the
price of raw materials may rise in the near term due to
decreasing U.S. crop production, which may hurt the company's
Apart from Archer Daniels, ag stock
) carries a Zacks Rank #2 (Buy).
ARCHER DANIELS (ADM): Free Stock Analysis
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