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High Demand & Nutrition Unit to Aid Archer Daniels (ADM)
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Archer Daniels Midland Company (ADM - Free Report) has been gaining from solid demand, improved productivity and product innovations. Continued growth in the Nutrition segment remains a key growth driver. This led to the impressive fourth-quarter 2021 results, wherein both top and bottom lines advanced year over year. Revenues rallied 28.4% year over year, with solid sales across the majority of the segments. Adjusted earnings of $1.50 per share grew 24% year over year.
The company continued to witness a robust performance in its Nutrition segment, with year-over-year revenue growth of 19%. The segment’s adjusted operating profit grew 26% year over year, owing to significant gains in the Human and Animal Nutrition units. The Human Nutrition unit gained from strength across all businesses. The continued momentum in Flavors, driven by improved product mix in EMEAI and the strong performance in North America, bodes well. The solid demand for plant-based proteins contributed to the Specialty Ingredients category.
The Health & Wellness unit also witnessed robust quarterly growth, particularly in bioactives and fermentation. The company has been investing in bolt-on acquisitions to build a one-stop-shop with top-notch ingredients and solutions for the Human Nutrition unit. It is also making efforts to strengthen its position in the highly-valued flavor space, with the acquisition of Flavor Infusion International and WILD.
The animal nutrition unit significantly grew year over year, driven by strength in amino acids. Some notable efforts in the category are the Neovia and Sojaprotein buyouts, investments in core nutrition categories to meet the alternative protein demand, and a 75% ownership stake in PetDine to leverage the rising pet food demand. It also formed a joint venture (JV) with Marathon Oil Company for renewable diesel production and another JV with Vland Biotech to help meet the retail demand for probiotics in China. Backed by strength across both Human and Animal Nutrition units, the nutrition segment expects more than 15% operating profit growth for 2022. It is also on its way to attaining $1 billion in operating profit in the years ahead.
Archer Daniels has been making efforts to expand its solutions portfolio, which forms part of its Carbohydrate Solutions unit. ADM collaborated with LG Chem to produce lactic and polylactic acids for bioplastics, which is a plant-based product. Earlier, the company launched Biosolutions to expand its portfolio of sustainable higher-margin solutions, particularly for pharmaceuticals and personal care markets.
Such endeavors are likely to help attain 10% revenue growth on an annual basis. In a recent development, Archer Daniels entered a joint venture with Gevo to help meet the demand for low carbon sustainable aviation fuel. The company is also utilizing innovative technologies to develop products and boost operating capabilities.
Driven by the above-mentioned factors, management expects the positive momentum to continue in 2022. The operating profit is likely to grow more than 15% in 2022, with revenue growth of more than 10%.
Wrapping Up
Image Source: Zacks Investment Research
We hope that strength in the nutrition unit, product innovation and solid demand will help sustain Archer Daniels’ momentum. The consensus mark for 2022 earnings has moved 8.7% north over the past 30 days to $5.14. Topping it, a long-term earnings growth rate of 1.8% and a VGM Score of A drive optimism. Shares of this Zacks Rank #1 (Strong Buy) stock has gained 15.4% in the past three months compared with the industry’s 4.7% growth. You can see the complete list of today’s Zacks #1 Rank stocks here.
Inter Parfums currently sports a Zacks Rank #1. IPAR has a trailing four-quarter earnings surprise of 29.7%, on average.
The Zacks Consensus Estimate for Inter Parfums’ current financial-year sales and EPS suggests growth of 63.2% and 117.4%, respectively, from the year-ago period’s reported figures.
Albertsons Companies currently flaunts a Zacks Rank #1. ACI has a trailing four-quarter earnings surprise of 31.8%, on average.
The Zacks Consensus Estimate for Albertsons Companies current financial-year sales suggests growth of 1.6%, while the same for EPS indicates a decline of 9% from the year-ago period’s reported figure.
Medifast, one of the leading health and wellness companies, currently has a Zacks Rank #2 (Buy). MED has a trailing four-quarter earnings surprise of 17.3%, on average.
The Zacks Consensus Estimate for Medifast’s current financial-year sales and earnings suggests growth of 63% and 49.3%, respectively, from the year-ago period’s figures.
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High Demand & Nutrition Unit to Aid Archer Daniels (ADM)
Archer Daniels Midland Company (ADM - Free Report) has been gaining from solid demand, improved productivity and product innovations. Continued growth in the Nutrition segment remains a key growth driver. This led to the impressive fourth-quarter 2021 results, wherein both top and bottom lines advanced year over year. Revenues rallied 28.4% year over year, with solid sales across the majority of the segments. Adjusted earnings of $1.50 per share grew 24% year over year.
The company continued to witness a robust performance in its Nutrition segment, with year-over-year revenue growth of 19%. The segment’s adjusted operating profit grew 26% year over year, owing to significant gains in the Human and Animal Nutrition units. The Human Nutrition unit gained from strength across all businesses. The continued momentum in Flavors, driven by improved product mix in EMEAI and the strong performance in North America, bodes well. The solid demand for plant-based proteins contributed to the Specialty Ingredients category.
The Health & Wellness unit also witnessed robust quarterly growth, particularly in bioactives and fermentation. The company has been investing in bolt-on acquisitions to build a one-stop-shop with top-notch ingredients and solutions for the Human Nutrition unit. It is also making efforts to strengthen its position in the highly-valued flavor space, with the acquisition of Flavor Infusion International and WILD.
The animal nutrition unit significantly grew year over year, driven by strength in amino acids. Some notable efforts in the category are the Neovia and Sojaprotein buyouts, investments in core nutrition categories to meet the alternative protein demand, and a 75% ownership stake in PetDine to leverage the rising pet food demand. It also formed a joint venture (JV) with Marathon Oil Company for renewable diesel production and another JV with Vland Biotech to help meet the retail demand for probiotics in China. Backed by strength across both Human and Animal Nutrition units, the nutrition segment expects more than 15% operating profit growth for 2022. It is also on its way to attaining $1 billion in operating profit in the years ahead.
Archer Daniels has been making efforts to expand its solutions portfolio, which forms part of its Carbohydrate Solutions unit. ADM collaborated with LG Chem to produce lactic and polylactic acids for bioplastics, which is a plant-based product. Earlier, the company launched Biosolutions to expand its portfolio of sustainable higher-margin solutions, particularly for pharmaceuticals and personal care markets.
Such endeavors are likely to help attain 10% revenue growth on an annual basis. In a recent development, Archer Daniels entered a joint venture with Gevo to help meet the demand for low carbon sustainable aviation fuel. The company is also utilizing innovative technologies to develop products and boost operating capabilities.
Driven by the above-mentioned factors, management expects the positive momentum to continue in 2022. The operating profit is likely to grow more than 15% in 2022, with revenue growth of more than 10%.
Wrapping Up
We hope that strength in the nutrition unit, product innovation and solid demand will help sustain Archer Daniels’ momentum. The consensus mark for 2022 earnings has moved 8.7% north over the past 30 days to $5.14. Topping it, a long-term earnings growth rate of 1.8% and a VGM Score of A drive optimism. Shares of this Zacks Rank #1 (Strong Buy) stock has gained 15.4% in the past three months compared with the industry’s 4.7% growth. You can see the complete list of today’s Zacks #1 Rank stocks here.
How Other Stocks Fared
Some other top-ranked stocks in the Consumer Staples sector are Inter Parfums (IPAR - Free Report) , Albertsons Companies (ACI - Free Report) and Medifast (MED - Free Report) .
Inter Parfums currently sports a Zacks Rank #1. IPAR has a trailing four-quarter earnings surprise of 29.7%, on average.
The Zacks Consensus Estimate for Inter Parfums’ current financial-year sales and EPS suggests growth of 63.2% and 117.4%, respectively, from the year-ago period’s reported figures.
Albertsons Companies currently flaunts a Zacks Rank #1. ACI has a trailing four-quarter earnings surprise of 31.8%, on average.
The Zacks Consensus Estimate for Albertsons Companies current financial-year sales suggests growth of 1.6%, while the same for EPS indicates a decline of 9% from the year-ago period’s reported figure.
Medifast, one of the leading health and wellness companies, currently has a Zacks Rank #2 (Buy). MED has a trailing four-quarter earnings surprise of 17.3%, on average.
The Zacks Consensus Estimate for Medifast’s current financial-year sales and earnings suggests growth of 63% and 49.3%, respectively, from the year-ago period’s figures.