Freedom Broker analysts presented their investment idea of the day on Archer Daniels Midland (ADM) shares, recommending buying them with a target price of $95. At the current price of $84,6, the upside potential is 12,29%. A recovery in earnings and new U.S. biofuel usage mandates could support the stock.
What Archer Daniels Midland does
Archer Daniels Midland is one of the world’s largest agribusiness companies. It processes soybeans, corn, and other agricultural crops, producing vegetable oils, protein and feed components, food ingredients, and ethanol.
The company has a network of grain elevators, processing facilities, and logistics assets, and therefore occupies an important place in the global agricultural commodity supply chain. ADM’s market capitalization at the time of writing was $38,12 bn.
Freedom Broker expects further earnings recovery
ADM offers an attractive combination of earnings recovery and a clear political catalyst, Freedom Broker analysts note. In their view, two consecutive increases to the annual forecast indicate that market expectations may still be lagging improvements in the company’s fundamentals. At the beginning of 2026, ADM projected adjusted EPS in the range of $3,60–4,25, then raised the guidance to $4,15–4,70, and after the Q2 report — to $5,15–5,60.
The midpoint of the new range is about $5,38 per share — nearly 50% higher than adjusted earnings for 2025. At the current price, the stock trades at roughly 15x projected 2026 earnings. According to the analyst’s calculations, a 17x multiple implies a value of about $91, while a 17,5–18x valuation corresponds to a $94–97 range and supports the $95 target price.
Biofuels improve business economics
The key catalyst, analysts say, is the approval of mandatory biofuel blending volumes in the U.S. under the federal Renewable Fuel Standard program for 2026–2027, which requires producers and importers to blend a certain volume of biofuel into the motor fuel they sell. Higher mandates support demand for ethanol and vegetable oils. ADM’s management also cites high energy prices and lower corn costs in the U.S. as factors improving ethanol production economics.
The positive effect also extends to oilseed processing: rising biofuel demand increases the need for corn and soybean oil, supporting margins in both businesses.
ADM plans to invest in four facilities in the U.S. and increase total oilseed processing capacity by about 700 thousand tons per year. This equates to more than 25 million bushels of additional demand for agricultural raw materials from U.S. farmers.
Quarterly profit surged
In Q2 2026, ADM’s net profit amounted to $908 mln, and adjusted net profit was $895 mln. Pretax profit reached $1,088 bn versus $279 mln a year earlier.
Diluted EPS rose from $0,45 to $1,87, while adjusted EPS increased from $0,93 to $1,84. Total segment operating profit climbed 75%, to $1,450 bn.
For the first half of the year, pretax profit rose 133%, to $1,472 bn. Total segment operating profit increased 40%, to $2,214 bn, and adjusted EPS — by 57%, to $2,56. The 2026 capex forecast was maintained in the $1,3–1,5 bn range.
From the 2025 downturn to recovery
In Q4 2025, ADM revenue fell 6,5% y/y, to $21 498 mln, and for the full year — by 9%, to $85 530 mln. Annual net profit decreased 48%, to $1 800 mln, while adjusted EPS was $4,74.
The current investment idea is based on a rebound from this weak base. Freedom Broker expects that a recovery in oilseed processing and ethanol production, as well as government support for biofuels, will allow the market to gradually re-rate ADM shares. The recommended stop-loss level is $72, and the idea’s horizon is until October 28, 2026.
Not an individual investment recommendation.