Archer-Daniels-Midland (ADM) Could Be 44% Undervalued Following Plant Upgrades And Higher Guidance

Simply Wall St.09-02

Archer-Daniels-Midland (ADM) stock is in focus after the company outlined about $100 million of capacity upgrades at four U.S. oilseed-crushing plants and raised its full-year 2026 adjusted earnings ...

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The latest capacity plans and higher 2026 earnings guidance have arrived alongside a strong run in Archer-Daniels-Midland’s stock, with the share price at $84.55 and a year-to-date share price return of 43.18%, while the 1-year total shareholder return of 40.24% points to momentum that has built over the past year rather than just the past few weeks. Extend the Archer-Daniels-Midland thesis by comparing it with other agriculture and food-linked stocks that screen well on quality and value through our curated 50 high quality undervalued stocks. After a 43.18% year to date move, Archer-Daniels-Midland now sits well above many analyst targets. The real decision for investors is whether today’s price already reflects that optimism or still leaves a margin of safety. AdvertisementMost Popular Narrative: 7% Overvalued Archer-Daniels-Midland is trading at $84.55 compared with a most followed narrative fair value of $78.70 that is based on a 7.24% discount rate.  Policy clarity and ongoing government support for biofuels including the extension of the 45Z tax credit, favorable RVOs, and domestic feedstock incentives are expected to drive increased soybean oil demand and improved crush margins, directly supporting ADM's revenue and net margins from late 2025 into 2026.  Read the complete narrative. Read the complete narrative. Want to understand why this biofuel story supports a richer valuation for Archer-Daniels-Midland? The narrative leans heavily on margin shifts, earnings mix, and a higher future earnings multiple that many investors usually associate with faster growing sectors. Result: Fair Value of $78.70 (OVERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, Archer-Daniels-Midland’s biofuel and earnings narrative still faces clear risks if policy support proves less durable than expected, or if core Ag Services and Oilseeds margins weaken further. Find out about the key risks to this Archer-Daniels-Midland narrative. Another View On Archer-Daniels-Midland’s Valuation The most followed Archer-Daniels-Midland narrative suggests the stock is about 7% overvalued at $84.55 versus a $78.70 fair value. Our DCF model, which prices the stock using projected future cash flows, points in the opposite direction and flags ADM as undervalued against an estimated value of $122.01. This indicates that one set of investors is focusing on nearer term earnings and multiples, while the SWS DCF model is putting more weight on longer term cash generation. The gap between $84.55 and $122.01 raises a simple question: Which set of assumptions do you trust more for your own process? Look into how the SWS DCF model arrives at its fair value. ADM Discounted Cash Flow as at Sep 2026Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Archer-Daniels-Midland for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 50 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity. Next Steps Sentiment around Archer-Daniels-Midland is clearly divided, so if you are interested it makes sense to review the numbers yourself and move quickly. For a clearer view of what investors are optimistic about, take a closer look at the 3 key rewards. Looking for more investment ideas beyond Archer-Daniels-Midland? If Archer-Daniels-Midland interests you, do not stop here. Use a few focused screens to spot other opportunities that could fit your portfolio before others move first.  Target resilient balance sheets and solid fundamentals by running a focused search through our list of solid balance sheet and fundamentals (53 results). Hunt for potential bargains with quality metrics that still look appealing using the curated 50 high quality undervalued stocks. Prioritise stability and income potential by scanning companies that appear in our 12 dividend fortresses.   This article by Simply Wall St is general in nature. We provide commentary based on historical data\n        and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n        financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n        Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n        Simply Wall St has no position in any stocks mentioned.New: Manage All Your Stock Portfolios in One PlaceWe've created the ultimate portfolio companion for stock investors, and it's free.• Connect an unlimited number of Portfolios and see your total in one currency• Be alerted to new Warning Signs or Risks via email or mobile• Track the Fair Value of your stocksTry a Demo Portfolio for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. 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