UPDATE: BMO Says Archer Daniels Midland is the Surprise Investment of 2012; Upgrades to Outperform and Increases PT
According to a research report published today, BMO Capital Markets claims Archer Daniels Midland's (NYSE: ADM) recent stock underperformance creates an attractive entry point to capitalize on recovery, and therefore BMO has upgraded ADM's rating to Outperform.
In the report, BMO said, “First, despite near-term challenges, ADM's outlook should vastly improve after the spring, as business fundamentals should reset (i.e., new crop, dislocation, progress on E-15, increased protein production). Second, ADM has become a better steward of capital, as evidenced by 1) greater focus on logistics; 2) willingness to exit underperforming projects (e.g., green plastics); and 3) the wherewithal to reduce headcount. Third, despite weak fundamentals in F2Q12, it is notable that 1) ag services generated profits within the “normal” range; 2) cocoa incurred a $127 million MTM loss that will be recovered; and 3) HFCS recovered more quickly than expected.”
BMO increases PT to $35 on Archer Daniels Midland, which closed yesterday at $28.63.
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Tags: BMO Capital