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    Reduced Earnings Outlook Amid Policy Turmoil Could Be A Game Changer For Archer-Daniels-Midland (ADM)

    Simply Wall St·12/12/2025 01:20:51
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    • Earlier this week, Archer-Daniels-Midland cut its full-year adjusted earnings guidance to US$3.25–US$3.50 per share, citing trade uncertainty with China and unclear biofuel policies despite beating quarterly earnings expectations.
    • This guidance reset highlights how sensitive ADM’s profit outlook is to external policy and trade conditions across its global agricultural and biofuels operations.
    • We’ll now examine how ADM’s reduced earnings guidance, driven by trade and biofuel policy uncertainty, reshapes the company’s broader investment narrative.

    Find companies with promising cash flow potential yet trading below their fair value.

    Archer-Daniels-Midland Investment Narrative Recap

    To own Archer-Daniels-Midland, you need to believe in its role as a core operator in global food and biofuel supply chains, despite cyclical and policy-driven swings. The reduced US$3.25 to US$3.50 EPS guidance underlines that the key short term catalyst, clearer trade and biofuel policy, is also the biggest current risk to earnings visibility. This reset is meaningful because it shows how quickly external decisions can filter through to ADM’s margins and investor expectations.

    Against this backdrop, Fitch’s recent affirmation of ADM’s “A” credit rating with a Negative Outlook is particularly relevant. It highlights how softer EBITDA, higher leverage and ongoing investments are intersecting with today’s profit pressure from trade and biofuel uncertainty. Together, these datapoints frame a company that still has balance sheet strength, but less room for error if earnings volatility persists.

    But investors should also be aware that prolonged policy uncertainty around biofuels could...

    Read the full narrative on Archer-Daniels-Midland (it's free!)

    Archer-Daniels-Midland's narrative projects $88.6 billion revenue and $2.1 billion earnings by 2028. This requires 2.3% yearly revenue growth and roughly a $1.0 billion earnings increase from $1.1 billion today.

    Uncover how Archer-Daniels-Midland's forecasts yield a $57.60 fair value, a 4% downside to its current price.

    Exploring Other Perspectives

    ADM 1-Year Stock Price Chart
    ADM 1-Year Stock Price Chart

    Thirteen members of the Simply Wall St Community value ADM anywhere between US$31.64 and US$72.54, reflecting a wide spread of expectations. As you weigh those views, remember that ADM’s earnings guidance cut tied to trade and biofuel policy could materially influence how its profit profile evolves from here.

    Explore 13 other fair value estimates on Archer-Daniels-Midland - why the stock might be worth as much as 21% more than the current price!

    Build Your Own Archer-Daniels-Midland Narrative

    Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.