Archer Daniels Midland Company ADM is slated to report third-quarter 2024 results on Nov. 5, before market open. The company is likely to report bottom and top-line declines when it posts the quarterly results.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
The Zacks Consensus Estimate for ADM’s earnings is pegged at $1.32 per share, which indicates a decrease of 19% from the year-ago quarter’s reported figure. The consensus mark has fallen 3.6% in the past seven days. For revenues, the consensus mark is pegged at $20.7 billion, implying a 4.7% dip from the year-ago quarter’s reported figure.
The company delivered a negative earnings surprise of 16.3% in the last reported quarter and 0.9% in the trailing four quarters, on average.
Archer Daniels Midland Company Price and EPS Surprise
Archer Daniels Midland Company price-eps-surprise | Archer Daniels Midland Company Quote
What the Zacks Model Unveils for ADM
Our proven model does not conclusively predict an earnings beat for Archer Daniels this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here. You can uncover the best stocks before they are reported with our Earnings ESP Filter.
Archer Daniels currently has an Earnings ESP of +0.05% and a Zacks Rank of 5 (Strong Sell).
Key Factors to Note
One of the key factors contributing to Archer Daniels’ struggles has been the weak margins in its Agricultural Services & Oilseeds segment, driven by a challenging operating environment. The segment’s performance has suffered from reduced farmer selling in South America's Mato Grosso due to a smaller crop, coupled with elevated logistics costs tied to take-or-pay contracts, which lowered margins. In North America, results were soft as high supply from Brazil and Argentina shifted export competitiveness to South America, limiting trading opportunities.
ADM's crush margins have also been impacted by the return of Argentinian crush capacity and rising imports of used cooking oil, adding market pressure.
On the last reported quarter’searnings call management projected higher South America crop production to squeeze margins in 2024, while global soybean crush margins were expected to be strong due to robust demand for soybean meal and oil. For the third quarter, management anticipates margins in Ag Services & Oilseeds to be lower than the previous year but better than the cyclical low in the second quarter.
The Refined Products & Other segment has also been challenged by increased pre-treatment capacity and higher used cooking oil imports, which have strained refining profitability. Biodiesel margins have been suffering from low LCFS and RIN values, which are expected to have weighed on revenues in the to-be-reported quarter.
However, ADM has been focused on strategic initiatives, managing productivity, and fostering innovation aligned with food security, health and wellness trends. Management expressed optimism for stronger margins in the latter half of 2024, with processing capacity improvements across operations, including Green Bison’s ramp-up and expanded production in Ukraine.
ADM has been pursuing additional margin opportunities by expanding customer channels, advancing digital solutions for farmer support, extending its Regen Ag programs, and growing its BioSolutions platform. Additionally, the company expects to realize a large portion of its targeted $500-million cost savings from its execution excellence program within the first year of implementation. Gains from these efforts and trends should get reflected in the company’s third-quarter 2024 results.
ADM’s Valuation Picture & Price Performance
From a valuation perspective, Archer Daniels offers an attractive opportunity, trading at a discount relative to historical and industry benchmarks. With a forward 12-month price-to-earnings ratio of 10.9X, which is below the five-year high of 18.93X and the Agriculture - Operations industry’s average of 13.14X, the stock offers compelling value for investors seeking exposure to the sector.
The recent market movements show that ADM shares have declined 22.1% year to date compared with the industry's 7.2% fall.
Image Source: Zacks Investment Research
Stocks With the Favorable Combination
Here are some companies, which according to our model, have the right combination of elements to beat on earnings this reporting cycle.
Freshpet FRPT has an Earnings ESP of +11.99% and flaunts a Zacks Rank of 1 at present. The company is slated to witness top and bottom-line growth when it reports third-quarter 2024 results. The Zacks Consensus Estimate for FRPT’s quarterly revenues is pegged at $247.6 million, which suggests growth of 23.4% from the figure reported in the year-ago quarter.
You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Freshpet’s quarterly earnings has been unchanged in the past 30 days at 16 cents per share. The consensus mark for earnings indicates 206.7% growth from the year-ago quarter’s reported number. FRPT has delivered an earnings surprise of 132.9%, on average, in the trailing four quarters.
Clorox CLX has an Earnings ESP of +2.60% and a Zacks Rank of 2 at present. The company is expected to register top and bottom-line growth when it reports first-quarter fiscal 2025 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $1.6 billion, which suggests growth of 17.6% from the figure reported in the year-ago quarter.
The Zacks Consensus Estimate for Clorox’s quarterly earnings has moved down by a penny in the past seven days at $1.36 per share. The consensus mark for earnings implies growth of 177.6% from the year-ago quarter’s reported number. CLX has delivered an earnings surprise of 122.9%, on average, in the trailing four quarters.
e.l.f. Beauty ELF currently has an Earnings ESP of +17.74% and a Zacks Rank #3. ELF is anticipated to register top-line growth when it reports second-quarter fiscal 2025 results. The Zacks Consensus Estimate for e.l.f. Beauty’s quarterly revenues is pegged at $291 million, indicating an increase of 35% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for e.l.f. Beauty’s earnings have moved down 4.3% in the past 30 days to 44 cents per share. The consensus estimate for earnings per share suggests a decline of 46.3% from the prior-year quarter’s reported figure. ELF has delivered an earnings beat of 40.3%, on average, in the trailing four quarters.
Zacks Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
See This Stock Now for Free >>Archer Daniels Midland Company (ADM) : Free Stock Analysis Report
The Clorox Company (CLX) : Free Stock Analysis Report
Freshpet, Inc. (FRPT) : Free Stock Analysis Report
e.l.f. Beauty (ELF) : Free Stock Analysis Report
To read this article on Zacks.com click here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
