NEW YORK (TheStreet) -- Archer Daniels Midland (ADM - Get Report) shares are trading lower by 0.83% to $47.69 after coverage was initiated at Vertical Research with a "hold" rating and a price target of $52, reports Benzinga.
The food and feed company is expected to benefit from a grain demand increase and a steady protein demand, according to analysts.
Earnings growth is expected to remain promising even though agriculture processors like ADM face risks from slow-growing economies and lower grain supply estimates, Vertical Research added.
The firm also noted that customers seeking healthier foods would lead sales growth for food processors.
Separately, shares of ARCHER-DANIELS-MIDLAND CO (ADM) stock are down today by $0.76 (1.57%) as of 1:00:12 PM. Thus far, 2.98 million shares of ARCHER-DANIELS-MIDLAND CO exchanged hands as compared to its average daily volume of 3.31 million shares. The stock has ranged in price between $46.73 to $48.32 after opening the day at $48.23 as compared to the previous trading day's close of $48.09. Overall, ARCHER-DANIELS-MIDLAND CO is lagging the S&P 500 which is down 0.41%. Important items of note for ARCHER-DANIELS-MIDLAND CO and possible rationale for parts of today's stock move go as follows:
TheStreet Ratings team rates ARCHER-DANIELS-MIDLAND CO as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate ARCHER-DANIELS-MIDLAND CO (ADM) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income, reasonable valuation levels, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Food Products industry. The net income increased by 84.6% when compared to the same quarter one year prior, rising from $267.00 million to $493.00 million.
- Net operating cash flow has significantly increased by 116.42% to $46.00 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 69.57%.
- The current debt-to-equity ratio, 0.34, is low and is below the industry average, implying that there has been successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.71 is somewhat weak and could be cause for future problems.
- You can view the full analysis from the report here: ADM Ratings Report