Archer-Daniels-Midland stock forecast after smashing analyst estimates

By: Motiur Rahman
Motiur Rahman
Md Motiur enjoys researching how companies are solving challenges the world will face over the coming decades. In his… read more.
on Oct 26, 2021
  • Archer-Daniels-Midland shares on Tuesday edged slightly lower despite delivering solid Q3 results.
  • The company announced its most recent quarterly results before markets opened, beating analyst estimates.
  • The ADM stock trades at an exciting forward P/E ratio of 14.40.

On Tuesday, Archer-Daniels-Midland Co. (NYSE:ADM) shares edged slightly lower despite reporting better-than-expected fiscal third-quarter results. The company announced its most recent results before markets opened, beating analyst expectations on revenue and earnings.

The company posted FQ3 non-GAAP earnings per share of $0.97, beating the consensus Street estimate of $0.88. In addition, its GAAP EPS of $0.93, was slightly above the average for analyst estimates of $0.91, while revenue for the quarter increased by 34.4% from the same period a year ago to $20.34 billion, $2.41 billion ahead of estimates.

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Commenting on the earnings report, the company CEO said:

We have put ADM on track for a strong fourth quarter culminating in a second consecutive year of record earnings per share.

ADM shares look undervalued

From an investment perspective, Archer-Daniels-Midland shares trade at compelling trailing 12-month and forward P/E ratios of 16.21 and 14.40, respectively, making the stock an attractive option for value investors.

In addition, analysts expect the company’s earnings per share to increase by 24.80% this year, before growing at an average annual rate of nearly 10% over the next five years.

Therefore, although Archer-Daniels-Midland shares are up more than 33% this year, the stock still looks like an exciting option for investors.

Source – TradingView

Technically, Archer-Daniels shares seem to be trading within an ascending channel formation in the intraday chart. As a result, the stock has rallied to the overbought conditions of the 14-day RSI. 

However, with shares yet to retest the trendline resistance, the current bull-run could continue. 

Therefore, investors could target extended gains at about $68.75, or higher at $70.74, while $65.07 and $63.02, are crucial support zones.

It may not be too late to buy ADM stock

In summary, although Archer-Daniels-Midland shares have rallied to the overbought conditions of the 14-day RSI, the stock has room left to run before retesting the trendline resistance.

In addition, given the company’s exciting growth prospects and compelling valuation multiples, it may not be too late to buy ADM stock.

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