Zacks Investment Research downgraded shares of Archer Daniels Midland Company (ADM) from OUTPERFORM to NEUTRAL on December 05, 2014, with a target price of $55.00.
Archer-Daniels posted better-than-expected third-quarter 2014 earnings, backed by strong ethanol demand, improvement in the U.S. grain export volumes and stringent cost-containment efforts. Archer-Daniels' consistent focus on enhancing its processing capabilities and global footprint through strategic acquisitions bode well for future growth. Moreover, we are encouraged by its strong cash flow generation ability and capital allocation strategies which help it to make investments toward the development of business while using the excess cash to enhance shareholder returns. However, significant presence in the international market exposes the company to unfavorable foreign currency translations and economic and political instability. The company also remains sensitive to rising commodity prices. Hence, we downgraded our Outperform recommendation to Neutral on the stock.
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