Archer-Daniels-Midland Company Just Released Its Yearly Results And Analysts Are Updating Their Estimates
Archer-Daniels-Midland Company (NYSE:ADM) last week reported its latest yearly results, which makes it a good time for investors to dive in and see if the business is performing in line with expectations. The result was positive overall - although revenues of US$65b were in line with what analysts predicted, Archer-Daniels-Midland surprised by delivering a statutory profit of US$2.44 per share, modestly greater than expected. Analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what analysts are expecting for next year.
See our latest analysis for Archer-Daniels-Midland
Taking into account the latest results, the most recent consensus for Archer-Daniels-Midland from ten analysts is for revenues of US$66.7b in 2020, which is a credible 3.1% increase on its sales over the past 12 months. Statutory earnings per share are expected to shoot up 33% to US$3.27. Before this earnings report, analysts had been forecasting revenues of US$66.6b and earnings per share (EPS) of US$3.26 in 2020. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
There were no changes to revenue or earnings estimates or the price target of US$48.31, suggesting that the company has met expectations in its recent result. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Archer-Daniels-Midland at US$53.00 per share, while the most bearish prices it at US$38.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
Another way to assess these estimates is by comparing them to past performance, and seeing whether analysts are more or less bullish relative to other companies in the market. For example, we noticed that Archer-Daniels-Midland's rate of growth is expected to accelerate meaningfully, with revenues forecast to grow at 3.1%, well above its historical decline of 3.6% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 2.7% per year. So it looks like Archer-Daniels-Midland is expected to grow at about the same rate as the wider market.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with analysts reconfirming that earnings per share are expected to continue performing in line with their prior expectations. Happily, there were no real changes to sales forecasts, with the business still expected to grow in line with the overall market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Archer-Daniels-Midland going out to 2023, and you can see them free on our platform here..
You can also view our analysis of Archer-Daniels-Midland's balance sheet, and whether we think Archer-Daniels-Midland is carrying too much debt, for free on our platform here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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