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UPDATE: JP Morgan Initiates Archer-Daniels-Midland at Underweight on Capacity and Margin Pressures

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JP Morgan initiated coverage on Archer-Daniels-Midland (NYSE: ADM) with an Underweight rating and a $28 price target.

JP Morgan noted, "ADM's North American capacity (67% of total) is likely to remain under pressure for the foreseeable future as a result of the Midwest drought and the resulting lack of supply of crops; this is likely to pressure margins in its Oilseeds Processing and Ag Services businesses in H1'13. In addition, ADM's ethanol business continues to face demand as well as cost headwinds, and margins could get worse before they get better. While ADM is already trading at a discount to peers and was down 2% in 2012 (vs. S&P up 16%), we believe this is justified given the continued earnings risk in several businesses; hence, our Underweight rating with a YE'13 price target of $28."

Archer-Daniels-Midland closed at $29.22 on Friday.

Latest Ratings for ADM

DateFirmActionFromTo
Feb 2016BMO CapitalMaintainsMarket Perform
Jan 2016Standpoint ResearchUpgradesHoldBuy
Nov 2015Buckingham ResearchMaintainsNeutral

View More Analyst Ratings for ADM
View the Latest Analyst Ratings

Posted-In: JP MorganAnalyst Color Initiation Pre-Market Outlook Analyst Ratings

 

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