Archer-Daniels-Midland CompanyADM
NYSE • Consumer Defensive
$69.73
P/E
31.29
PEG
0.95
FCF Yield
16.3%
Rev Growth YoY
-13.7% YoY
Gross Margin
6.3%
Health Score
6/10
D/E Ratio
0.37
Confidence
MEDIUM
Business Snapshot
Archer-Daniels-Midland (ADM) is one of the world's largest agricultural commodities processors and traders, operating across crop origination, oilseed processing, carbohydrate solutions, and nutrition segments. The company serves global food, feed, fuel, and industrial markets, with a trailing twelve-month revenue base of $80.27B. At a market capitalisation of $33.90B, ADM sits firmly in large-cap territory.
Financial Health
Score: 6/10 ADM's balance sheet is conservatively structured, with a debt-to-equity ratio of just 0.37x, indicating limited financial leverage risk. Free cash flow of $5.52B is a genuine standout, delivering an FCF yield of 16.3% — a figure that implies strong cash generation relative to market value...
Risk Assessment
- REVENUE DECLINE: Revenue contracted 13.7% year-over-year to $80.27B, signalling meaningful top-line pressure in the current operating environment.
- EARNINGS DETERIORATION: Net income fell 19.7% YoY to $1.06B, compressing an already thin 1.3% net margin.
- VALUATION MISMATCH: P/E of 31.29x is approximately 25% above the sector average of 25x, a demanding multiple for a company with declining earnings.
- ANALYST CONSENSUS: Only 10% of covering analysts rate ADM a buy, with 50% on hold — indicating a broad lack of institutional conviction in near-term upside.
- MARGIN FRAGILITY: Gross margin of 6.3% leaves virtually no buffer against commodity cost spikes, volume shortfalls, or pricing pressure.
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**Score: 6/10** ADM's balance sheet is conservatively structured, with a debt-to-equity ratio of just 0.37x, indicating limited financial leverage risk. Free cash flow of $5.52B is a genuine standout, delivering an FCF yield of 16.3% — a figure that implies strong cash generation relative to market value. However, profitability is thin: gross margin of 6.3% and a net margin of just 1.3% TTM reflect the inherently low-margin nature of commodity processing, leaving the business highly sensitive to volume and price dynamics. ---
- **REVENUE DECLINE:** Revenue contracted 13.7% year-over-year to $80.27B, signalling meaningful top-line pressure in the current operating environment. - **EARNINGS DETERIORATION:** Net income fell 19.7% YoY to $1.06B, compressing an already thin 1.3% net margin. - **VALUATION MISMATCH:** P/E of 31.29x is approximately 25% above the sector average of 25x, a demanding multiple for a company with declining earnings. - **ANALYST CONSENSUS:** Only 10% of covering analysts rate ADM a buy, with 50% on hold — indicating a broad lack of institutional conviction in near-term upside. - **MARGIN FRAGILITY:** Gross margin of 6.3% leaves virtually no buffer against commodity cost spikes, volume shortfalls, or pricing pressure. ---
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