NEW YORK (TheStreet) -- Shares of Archer Daniels Midland (ADM - Get Report) are up 0.54% to $40.67 in pre-market trading on Tuesday after the agricultural commodities company's stock rating was raised to "outperform" from "market perform" at BMO Capital Markets.
The firm also raised its price target to $48 from $36 because they say the company's fundamentals are set to improve in the second half of the year.
"Fundamentals likely will reach a nadir in 2Q16 and begin to vastly improve in FY2H16, while ADM's portfolio reshaping and internal initiatives should create more stable growth," BMO analysts wrote in a note released this morning.
Despite a weak 2016 second quarter, analysts believe Archer's U.S. crush margins will recover because of less competition from South America and that the ethanol outlook will improve because of higher demand next year.
"As discussed at our Farm To Market conference panel..., ingredient companies, including ADM, will become more integral to innovation and reformulation," analysts added.
Separately, Archer Daniels Midland has a "hold" rating and a letter grade of C+ at TheStreet Ratings because of the company's reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures, which offsets feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity.
You can view the full analysis from the report here: ADM
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.