UPDATE: Credit Suisse Raises PT to $37 on Archer Daniels Midland; Improved Execution
Credit Suisse increases its price target from $35 to $37 on Outperform-rated Archer Daniels Midland (NYSE: ADM) on improving execution and competitive positioning following Q3 earnings.
Credit Suisse notes, "Our F2012 EPS estimate is raised to $2.55 from $2.52. While the results in the quarter were not great, the company executed well in a tough oilseeds environment and delivered better ethanol results than we feared. This reinforces our conviction that the company's transition to a more ROIC-focused management is working, and that ADM is set up for a much stronger FY 13. We expect ADM to benefit from a 12-14% increase in U.S. corn production, strong origination out of North America in the fall to compensate for the weak Brazilian soy crop, temporary shutdowns of 14-15 "destination" ethanol plants by competitors outside of the corn belt, and full realization of $150 million in savings from workforce reductions and the elimination of financial reporting redundancies by March, 2013."
ADM closed at $33.02 on Tuesday.
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