UPDATE: Stifel Nicolaus Initiates Archer Daniels Midland on Favorable 2014 Outlook

In a report published Tuesday, Stifel Nicolaus analyst Paul Massoud initiated coverage on Archer-Daniels-Midland ADM with a Hold rating.

According to the report, “We believe ADM is entering a more favorable operating environment in 2014, though in our opinion, the upside is already priced into the shares, given the stock’s YTD performance (+58.3% vs. the S&P 500 which was up 27.5% YTD).”

Some notable points from the report included:
-"We believe strong U.S. crop production and subsequently lower prices should boost processing margins by way of lower costs in 2014.”
-"We see ADM’s global footprint as a significant asset, which we believe will allow
the company to source crops from surplus producing countries and deliver to
countries unable/unwilling to meet demand with domestic production.”
-"ADM is currently trading at 8.3x our 2014 EBITDA estimate, which we believe is
close to previous peak year valuations.”
-"We estimate 4Q13 EPS of $0.86 (vs. the Street consensus of $0.84) and
EBITDA of $1.0 billion (vs. the Street consensus of $1.0 billion), resulting in
full-year 2013 EPS of $2.27 (vs. the Street consensus of $2.25) and EBITDA of
$3.1 billion (vs. the Street consensus of $3.2 billion).”

Archer-Daniels-Midland closed Tuesday at $43.04.