Following Archer-Daniels-Midland's (ADM) recently released FY2025 earnings report, how does the recovery in the Nutrition segment’s operating margins compare to management's multi-year turnaround targets after the 2024 accounting restatements?

Following Archer-Daniels-Midland’s (ADM) FY2025 earnings release, the recovery in the Nutrition segment’s operating margins remains significantly below management’s original long-term targets, though it shows incremental progress under a revised post-restatement turnaround plan. While the segment was ADM's only growth driver in FY2025, its profitability is still a fraction of the $1.25 billion to $1.5 billion operating profit target originally set for 2025 during the 2021 Investor Day. Nutrition Segment Performance vs. Historical Targets The Nutrition segment’s recovery is characterized by a stabilization of profits following the $228 million cumulative reduction in operating profit necessitated by the 2024 accounting restatements. FY2025 Operating Profit: The segment reported $417 million in operating profit for the full year, an 8% increase compared to the restated FY2024 profit of $386 million . Margin Trajectory: Despite the year-over-year growth, the current profit level represents a sharp decline from the restated $668 million peak achieved in 2022. The implied operating margins (estimated in the mid-single digits based on $1.8 billion in quarterly revenue) remain well below the double-digit margins envisioned in the company's "milestone" 2025 plan. Subsegment Divergence: Animal Nutrition: A primary bright spot, with operating profit surging 66% to $98 million in FY2025, driven by a pivot toward higher-margin specialty products and cost optimization. Human Nutrition: Operating profit fell 2% to $319 million , largely due to the absence of $71 million in insurance proceeds received in the prior year, which masked underlying growth in the Flavors business. Post-Restatement Turnaround Targets Following the 2024 accounting probe, management shifted from aggressive growth targets to a "self-help" and "simplification" agenda focused on margin restoration through cost-cutting and portfolio pruning. Cost Savings Milestones: ADM is targeting $500 million to $750 million in aggregate cost savings over a 3-to-5-year horizon. For FY2025, the company reported being on track to achieve its initial $200 million to $300 million portion of that goal. Operational Recovery (Decatur East): The recommissioning of the Decatur East facility, which faced unplanned downtime in 2024, was a critical headwind. Management noted that the plant is now ramping to planned run rates, which is expected to reduce costs in Specialty Ingredients by $20 million to $25 million per quarter starting in 2026. Portfolio Optimization: To improve margins, ADM has slashed its Nutrition brand count by two-thirds and reduced product offerings by 17% . A key strategic move includes the 2026 commencement of a joint venture with Alltech to further shift Animal Nutrition toward high-margin specialty ingredients. Risks and Forward Outlook While management describes the FY2025 results as "green shoots," several factors continue to weigh on the margin recovery timeline: Customer Retention: Management acknowledged that some customers moved to competitors during the 18-month period of supply instability at Decatur East, making market share recovery a gradual process. Accounting Scrutiny: Ongoing investigations by the SEC and DOJ regarding intersegment pricing between Nutrition and other units (Ag Services & Oilseeds and Carbohydrate Solutions) continue to create an overhang on the segment's perceived "normalized" margin profile. 2026 Guidance: ADM expects a $100 million reduction in headwinds for the Nutrition segment in 2026, positioning it for "stronger organic growth," though it has refrained from reinstating the specific $1 billion+ profit targets of the pre-investigation era.

Given the resolution of the DOJ and SEC investigations in late 2025, to what extent is the current Archer-Daniels-Midland (ADM) valuation discount relative to Bunge (BG) driven by lingering governance risk premiums versus fundamental headwinds in the Ag Services & Oilseeds segment?

As of early 2026, the valuation relationship between Archer-Daniels-Midland (ADM) and Bunge Global (BG) has undergone a significant structural shift. While ADM historically commanded a premium due to its diversified "Nutrition" segment and larger scale, it currently trades at a compressed valuation relative to its historical average, and in some forward-looking metrics, a discount to Bunge when adjusted for the latter’s Viterra integration. The current valuation gap is driven by a combination of residual governance skepticism and segment-specific fundamental headwinds that are more acute for ADM than for Bunge. ⚖️ Valuation & Market Context Following the January 27, 2026, resolution of the DOJ and SEC investigations, ADM’s valuation reflects a "show-me" story. While the $40M SEC settlement and the closure of the DOJ probe removed the immediate threat of criminal prosecution, they did not fully erase the governance risk premium. Forward P/E (2026E): ADM is trading at approximately 14.0x , while Bunge trades at roughly 11.5x to 12.0x . Although ADM still holds a nominal premium, the gap has narrowed from historical levels where ADM often traded 3-5 turns above Bunge. EV/EBITDA (TTM): ADM’s multiple sits at 12.47x , reflecting a market that is pricing in lower quality of earnings following the restatement of the Nutrition segment's historical profits. 🏛️ Governance Risk: The "Trust Deficit" The resolution of the investigations has shifted the risk from legal liability to disclosure integrity. Segment Reporting Skepticism: The SEC charges specifically targeted the "material inflation" of the Nutrition segment through improper intersegment sales. Because this segment was ADM’s primary growth engine and the justification for its premium multiple, investors remain wary of the true run-rate profitability of this business. Leadership Overhang: While the DOJ probe is closed, the SEC is still litigating against former CFO Vikram Luthar. This ongoing legal activity serves as a persistent reminder of the internal control failures that necessitated the restatement of 2023 and 2024 financials. 🌾 Fundamental Headwinds: Ag Services & Oilseeds (AS&O) While governance issues provide the "floor" for the discount, the "ceiling" is capped by deteriorating fundamentals in the Ag Services & Oilseeds segment, which accounts for the bulk of ADM's earnings. Crush Margin Compression: Global soybean crush margins have retreated from record highs. ADM’s heavy reliance on North American processing makes it more sensitive to the -20% YoY decline in domestic margins compared to Bunge’s more geographically balanced footprint. Bunge’s Viterra Advantage: Bunge’s successful integration of Viterra (completed in mid-2025) has provided it with superior "origination" capabilities. Bunge now possesses a larger global network to navigate the current global grain glut, allowing it to capture higher merchandising margins than ADM, which is more tied to fixed processing assets. Biofuel Policy Uncertainty: Both companies are navigating the transition to 45Z Clean Fuel Production Credits. However, ADM’s larger capital commitment to renewable diesel feedstocks in the U.S. creates a higher "policy beta," meaning its earnings are more volatile in response to EPA and Treasury Department guidance. 🔍 Comparative Outlook The market appears to be rewarding Bunge for its idiosyncratic growth (Viterra synergies) while penalizing ADM for its idiosyncratic risk (governance and Nutrition segment opacity). | Metric | Archer-Daniels-Midland (ADM) | Bunge Global (BG) | | :--- | :--- | :--- | | Primary Driver | Recovery & Compliance Reset | Synergy Realization (Viterra) | | AS&O Exposure | High (North America centric) | High (Global/Diversified) | | Nutrition Segment | Underperforming / Restated | N/A (Focus on refined oils) | | 2026 EPS Outlook | Downbeat (Guidance lowered) | Conservative (Conservative start) | ⚠️ Risks & Uncertainties Regulatory Tail Risk: While the DOJ and SEC corporate probes are resolved, any new revelations from the ongoing litigation against former executives could trigger further volatility. Macro Volatility: A sudden shift in South American crop yields or a change in U.S. trade policy (tariffs) could disproportionately impact ADM’s export-heavy Ag Services business.

With soybean crush margins facing compression in early 2026 due to record South American harvests, how effectively is Archer-Daniels-Midland (ADM) leveraging its expanded Sustainable Aviation Fuel (SAF) feedstock capacity to offset volume declines in traditional export markets?

As of early 2026, Archer-Daniels-Midland (ADM) is navigating a complex "two-tier" soybean market. While record South American harvests have severely compressed global crush margins and eroded traditional export volumes, ADM is aggressively pivoting its North American operations toward domestic Sustainable Aviation Fuel (SAF) and renewable diesel (RD) feedstock. The effectiveness of this pivot is currently a study in structural transition: domestic demand for low-carbon intensity (CI) feedstock has created a significant price premium for U.S. soybean oil, yet this has not yet fully offset the broader earnings decline in ADM’s Ag Services and Oilseeds (AS&O) segment. Market Dynamics: The "Two-Tier" Soybean Economy The global soybean market has decoupled into two distinct environments. In the international market, a projected record Brazilian harvest of 178.8 MMT and a recovering Argentine crop have created a global surplus, driving international prices to multi-year lows. Conversely, the U.S. domestic market is experiencing a "feedstock squeeze." The full implementation of the 45Z Clean Fuel Production Credit in January 2026 has effectively cordoned off the U.S. market. Because the credit prioritizes domestic feedstocks, U.S. soybean oil has seen a year-to-date price surge of 43% as of February 2026. This domestic premium helps ADM capture higher value for its oil, even as the "meal" side of the crush remains pressured by global oversupply. ADM’s SAF Feedstock Strategy & Capacity ADM is leveraging its massive North American processing footprint to transition from a global commodity exporter to a specialized energy feedstock provider. Feedstock Optimization: ADM has optimized its crush facilities to produce "low-CI" soybean oil, which is essential for SAF producers to maximize tax credits. Decatur Hub Expansion: The company’s Decatur, Illinois, complex remains the epicenter of its SAF strategy. While the Broadwing Energy carbon-capture power project is slated to begin construction in 2026 , ADM is already utilizing its existing carbon sequestration wells to lower the CI score of its ethanol and vegetable oil, making them more competitive as SAF precursors. Volume Shifts: U.S. soybean oil use in biofuels is projected to reach 15.5B lbs for the 2025/26 marketing year. ADM is redirecting volumes that would historically have been exported to China or India into the domestic "bio-bidding war" led by energy majors. Financial Impact & Offset Effectiveness Despite the strategic pivot, the financial "offset" remains incomplete. ADM’s AS&O segment reported a -31% year-over-year decline in operating profit for Q4 2025, reaching $444M . Crush Margin Compression: The "Crushing" subsegment saw profits fall by -69% in the final quarter of 2025. While domestic oil prices are high, the global glut in soybean meal (the other 80% of the bean) has kept overall "board crush" margins thin. Export Volume Declines: Traditional North American soybean exports are expected to decline by approximately 70M bushels this season due to South American competition. 2026 Guidance: ADM issued a conservative adjusted EPS guidance of $3.60 to $4.25 for 2026, signaling that while SAF feedstock demand is a powerful catalyst, it is not yet sufficient to return the company to the record-high earnings seen in 2022-2023. Risks and Regulatory Uncertainties The primary headwind to ADM’s SAF leverage is regulatory lag. 1. 45Z Policy Clarity: The U.S. Treasury’s delay in finalizing 45Z rules throughout 2025 forced many biofuel producers to postpone feedstock purchases, contributing to ADM’s weak Q4 2025 results. 2. SAF Credit Reduction: Starting in 2026, the SAF tax credit base rate was equalized with road fuels at $1.00/gallon (down from $1.75), potentially cooling the "SAF premium" that feedstock providers like ADM were counting on. 3. Trade Policy: Potential tariffs and trade conflicts under the current administration create "execution risk" for ADM’s remaining export volumes, particularly to markets like India, which recently slashed tariffs on U.S. soy oil.

Archer-Daniels-Midland Company (ADM) Stock Price & AI Analysis

GoAI Score

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Valuation

50Fair Value

Sentiment

28Bearish

Risk

93Low Risk

Momentum

85Positive

Institutional-Grade Intelligence

🏆PRO

Actionable Intelligence

AI-driven stance, execution logic & risk thresholds

Catalyst Roadmap

Event timeline with expected impact & market context

Deep Insights

Fact-checked analysis & score logic breakdown

Financial Statements

Margin Trends

Gross

6.3%▼0.5pp

Revenue after COGS

Operating

1.8%▼0.6pp

After operating expenses

Net

1.3%▼0.8pp

Bottom-line profitability

Gross Margin

Operating Margin

Net Margin

Valuation Snapshot

P/E Ratio

25.8

Price vs earnings

EV/EBITDA

11.6

Enterprise value

FCF Yield

15.1%

Cash generation

Earnings Yield

3.9%

Inverse of P/E

Capital Efficiency

4

GoAI Quality ScoreWeak

ROEReturn on Equity

4.7%Fair

ROAReturn on Assets

3.1%Fair

ROICReturn on Invested Capital

3.5%Fair

Financial Health

Current RatioHealthy

11.20

Short-term solvency (>1.5)

Net Debt / EBITDAManageable

2.43x

Debt repayment capacity (<3x)

Income QualityStrong

5.08

Cash backs earnings (>1)

Revenue & Profitability

Revenue

Net Income

Net Loss

Income Statement

Metric	FY2025	FY2024	FY2023	FY2022	FY2021
Revenue	$80.27B	$85.53B	$93.94B	$101.56B	$85.25B
Gross Profit	$5.03B	$5.78B	$7.51B	$7.57B	$5.99B
Gross Margin	6.3%	6.8%	8.0%	7.5%	7.0%
Operating Income	$1.42B	$2.07B	$4.06B	$4.21B	$2.99B
Net Income	$1.08B	$1.80B	$3.48B	$4.34B	$2.71B
Net Margin	1.3%	2.1%	3.7%	4.3%	3.2%
EPS	$2.23	$3.66	$6.44	$7.72	$4.80

Average Price Target

$60.00▼ 11.6% Downside

Past 12 Months

12 Month Forecast

Based on 50 Wall Street analysts offering 12 month price targets for Archer-Daniels-Midland Company, the average price target is $60.00, with a high forecast of $68.00 and a low forecast of $50.00. The average price target represents a 11.6% decrease from the current price of $67.88.

Highest

$68.00

Average

$60.00

Lowest

$50.00

Rating Distribution

Strong Buy

0

0%

Buy

12

33%

Hold

21

58%

Sell

3

8%

Strong Sell

0

0%

Recent Analyst Ratings

FirmActionRatingDate

Barclays● Maintain

Equal Weight

2026-02-19

JP Morgan● Maintain

Underweight

2026-02-04

JP Morgan● Maintain

Underweight

2026-01-21

Morgan Stanley▼ Downgrade

Equal Weight→Underweight

2025-12-16

JP Morgan▼ Downgrade

Neutral→Underweight

2025-11-05

Morgan Stanley● Maintain

Equal Weight

2025-08-12

UBS● Maintain

Buy

2025-08-11

Barclays▲ Upgrade

Underweight→Equal Weight

2025-08-06

Barclays● Maintain

Underweight

2025-07-02

UBS▲ Upgrade

Neutral→Buy

2025-05-19

Earnings History & Surprises

BEAT RATE

78%

Last 18 quarters

AVG SURPRISE

+10.2%

EPS vs Estimate

BEATS / MISSES

14/3

1 met exactly

LATEST EPS

$0.87

Q1 '26

QUARTERLY EPS TREND

Estimated

Beat

Miss

QUARTERLY DETAIL

Q1 '26

+9.2%

$0.87 vs $0.80

Q4 '25

+8.4%

$0.92 vs $0.85

Q3 '25

+13.8%

$0.93 vs $0.82

Q2 '25

+5.6%

$0.70 vs $0.66

Q1 '25

$1.14 vs $1.14

Q4 '24

-8.4%

$1.09 vs $1.19

Q3 '24

-15.6%

$1.03 vs $1.22

Q2 '24

+7.4%

$1.46 vs $1.36

Q1 '24

-4.9%

$1.36 vs $1.43

Q4 '23

+7.2%

$1.63 vs $1.52

Q3 '23

+18.1%

$1.89 vs $1.60

Q2 '23

+17.4%

$2.09 vs $1.78

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