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Ongoing Strategies Put Archer Daniels (ADM) on Growth Track
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Archer Daniels Midland Company (ADM - Free Report) has been benefitting from significant progress on its three strategic pillars — optimize, drive and growth. Additionally, the company is actively managing productivity and innovation, as well as aligning work to the interconnected trends in food security, health and wellbeing. Hence, ADM is well-poised for sustainable long-term profit growth across new avenues.
Going forward, the company predicts steady demand and margins for starches, sweeteners and wheat flower products. Also, management is optimistic about ethanol margins on solid domestic demand and healthy U.S. exports, buoyed by fewer competing exports from Brazil on increased sugar prices.
In Animal Nutrition, the company is seeing the cost-optimization efforts and the expansion of offerings in the specialty feed and ingredient space. Management expects flavors to finish the year strong on growth in EMEA and North America.
These trends, along with gains from ongoing innovation and strategies, have been well reflected in its share price, which has outperformed the industry. Shares of this Zacks Rank #2 (Buy) company have lost 15.7% in the past year compared with the industry’s decline of 25.8%.
Image Source: Zacks Investment Research
Strategies in Focus
Under Archer Daniels’ optimize pillar, it earlier revealed plans to expand alternative protein capabilities in Decatur, IL, and starch production in Marshall, MN. ADM concluded its alternative protein expansion in Serbia.
As part of the company’s optimizing pillar, it has been adapting to consumers’ changing nutritional preferences. Under its drive pillar, the company continues to modify its organizational structure to meet operational excellence and set goals. Further, under the growth pillar, it is looking to expand its footprint in fast-growing alternative protein.
Notably, Archer Daniels inked an agreement with Benson Hill to process and commercialize a portfolio of proprietary ingredients derived from their ultra-high-protein soybeans.
In response to the growing trends for all things sustainable, Archer Daniels has been making efforts to expand its solutions portfolio, which forms part of its Carbohydrate Solutions unit. It collaborated with LG Chem to produce lactic and polylactic acids for bioplastics, which is a plant-based product. Earlier, the company collaborated with LG Chem for two joint ventures. This is helping produce lactic and polylactic acids for a variety of applications, including bioplastics across the United States.
Also, 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. 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.
More recently, Archer Daniels announced a significant move to bolster its flavor portfolio by signing an agreement to acquire the U.K.-based Fuerst Day Lawson Limited (“FDL”). FDL is a distinguished developer and producer of premium flavor and functional ingredient systems. Post acquisition, FDL will become an integral part of ADM's strategic expansion in the nutrition sector. Archer Daniels expects to complete the acquisition by the end of January 2024 after satisfying customary closing conditions.
The acquisition of FDL forms part of ADM's broader strategy to augment its flavor ingredients and solutions portfolio, aligning with its vision of becoming a global leader in nutrition. Since the acquisition of WILD Flavors in 2014, Archer Daniels has consistently expanded its flavor offerings through strategic acquisitions in various sectors, including dairy, savory, citrus and vanilla. The company has also invested organically in flavor production facilities and innovation centers across the globe.
Stocks to Consider
We highlighted some better-ranked stocks from the broader Consumer Staples space, namely Dole (DOLE - Free Report) , Ingredion (INGR - Free Report) and MGP Ingredients (MGPI - Free Report) .
Dole, a producer of fresh bananas and pineapples, currently sports a Zacks Rank #1 (Strong Buy). DOLE has a trailing four-quarter earnings surprise of 78.3%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for DOLE’s current financial year’s earnings suggests growth of 19.6% from the year-ago reported numbers.
Ingredion, an ingredients solutions provider specializing in nature-based sweeteners, starches and nutrition ingredients, currently has a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Ingredion’s current financial-year sales and earnings suggests growth of 5% and 24.7%, respectively, from the year-ago reported figures.
MGP Ingredients currently carries a Zacks Rank #2. MGPI produces and markets ingredients and distillery products to the packaged goods industry.
The Zacks Consensus Estimate for MGPI’s current financial-year sales and earnings indicates growth of 6% and 14.2%, respectively, from the year-ago reported figures. The company has a trailing four-quarter earnings surprise of 16.2%, on average.
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Ongoing Strategies Put Archer Daniels (ADM) on Growth Track
Archer Daniels Midland Company (ADM - Free Report) has been benefitting from significant progress on its three strategic pillars — optimize, drive and growth. Additionally, the company is actively managing productivity and innovation, as well as aligning work to the interconnected trends in food security, health and wellbeing. Hence, ADM is well-poised for sustainable long-term profit growth across new avenues.
Going forward, the company predicts steady demand and margins for starches, sweeteners and wheat flower products. Also, management is optimistic about ethanol margins on solid domestic demand and healthy U.S. exports, buoyed by fewer competing exports from Brazil on increased sugar prices.
In Animal Nutrition, the company is seeing the cost-optimization efforts and the expansion of offerings in the specialty feed and ingredient space. Management expects flavors to finish the year strong on growth in EMEA and North America.
These trends, along with gains from ongoing innovation and strategies, have been well reflected in its share price, which has outperformed the industry. Shares of this Zacks Rank #2 (Buy) company have lost 15.7% in the past year compared with the industry’s decline of 25.8%.
Image Source: Zacks Investment Research
Strategies in Focus
Under Archer Daniels’ optimize pillar, it earlier revealed plans to expand alternative protein capabilities in Decatur, IL, and starch production in Marshall, MN. ADM concluded its alternative protein expansion in Serbia.
As part of the company’s optimizing pillar, it has been adapting to consumers’ changing nutritional preferences. Under its drive pillar, the company continues to modify its organizational structure to meet operational excellence and set goals. Further, under the growth pillar, it is looking to expand its footprint in fast-growing alternative protein.
Notably, Archer Daniels inked an agreement with Benson Hill to process and commercialize a portfolio of proprietary ingredients derived from their ultra-high-protein soybeans.
In response to the growing trends for all things sustainable, Archer Daniels has been making efforts to expand its solutions portfolio, which forms part of its Carbohydrate Solutions unit. It collaborated with LG Chem to produce lactic and polylactic acids for bioplastics, which is a plant-based product. Earlier, the company collaborated with LG Chem for two joint ventures. This is helping produce lactic and polylactic acids for a variety of applications, including bioplastics across the United States.
Also, 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. 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.
More recently, Archer Daniels announced a significant move to bolster its flavor portfolio by signing an agreement to acquire the U.K.-based Fuerst Day Lawson Limited (“FDL”). FDL is a distinguished developer and producer of premium flavor and functional ingredient systems. Post acquisition, FDL will become an integral part of ADM's strategic expansion in the nutrition sector. Archer Daniels expects to complete the acquisition by the end of January 2024 after satisfying customary closing conditions.
The acquisition of FDL forms part of ADM's broader strategy to augment its flavor ingredients and solutions portfolio, aligning with its vision of becoming a global leader in nutrition. Since the acquisition of WILD Flavors in 2014, Archer Daniels has consistently expanded its flavor offerings through strategic acquisitions in various sectors, including dairy, savory, citrus and vanilla. The company has also invested organically in flavor production facilities and innovation centers across the globe.
Stocks to Consider
We highlighted some better-ranked stocks from the broader Consumer Staples space, namely Dole (DOLE - Free Report) , Ingredion (INGR - Free Report) and MGP Ingredients (MGPI - Free Report) .
Dole, a producer of fresh bananas and pineapples, currently sports a Zacks Rank #1 (Strong Buy). DOLE has a trailing four-quarter earnings surprise of 78.3%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for DOLE’s current financial year’s earnings suggests growth of 19.6% from the year-ago reported numbers.
Ingredion, an ingredients solutions provider specializing in nature-based sweeteners, starches and nutrition ingredients, currently has a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Ingredion’s current financial-year sales and earnings suggests growth of 5% and 24.7%, respectively, from the year-ago reported figures.
MGP Ingredients currently carries a Zacks Rank #2. MGPI produces and markets ingredients and distillery products to the packaged goods industry.
The Zacks Consensus Estimate for MGPI’s current financial-year sales and earnings indicates growth of 6% and 14.2%, respectively, from the year-ago reported figures. The company has a trailing four-quarter earnings surprise of 16.2%, on average.