Archer-Daniels-Midland's Financial Figures 'Are Too High,' Analyst Downgrades Stock
Portfolio Pulse from Vandana Singh
Archer-Daniels-Midland Company (NYSE:ADM) placed its CFO on leave amid an investigation into accounting practices. The company updated its FY23 EPS outlook to above $6.90, below consensus of $7.28, and withdrew its nutrition segment outlook. ADM delayed its earnings release due to the investigation. Baird downgraded ADM from Outperform to Neutral with a price target of $61, citing the current financial figures as too high and noting potential downside risks. ADM shares are down 23.40% at $52.22.

January 22, 2024 | 7:52 pm
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NEGATIVE IMPACT
ADM's CFO is on leave due to an accounting investigation, FY23 EPS outlook is revised down, and the nutrition segment outlook is withdrawn. Baird downgraded the stock with a lower price target.
The placement of ADM's CFO on leave and the investigation into accounting practices raise concerns about financial transparency and potential restatements, which are negative for investor sentiment. The lowered EPS outlook and withdrawal of the nutrition segment forecast suggest operational challenges, which could further impact the stock negatively. Baird's downgrade and reduced price target reflect a bearish outlook from analysts, likely leading to a decrease in investor confidence and a short-term negative impact on the stock price.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100