Morgan Stanley Slashes ADM, Bunge Targets Amid Weak 2025 Outlook

In the ever-evolving landscape of global agribusiness, Morgan Stanley has recently revised its price targets for Archer-Daniels-Midland Company (ADM) and Bunge Limited (BG) due to a weaker-than-expected 2025 outlook and earnings pressure. The investment bank cited supply risks and lower valuation multiples as contributing factors for ADM, while for Bunge, the outlook for 2025 was more backloaded, with equity markets showing less confidence in a second-half rebound.



The global agricultural market faces geopolitical uncertainty, which can disrupt supply chains and impact the availability and pricing of commodities. This uncertainty can lead to lower earnings and reduced growth prospects for ADM and Bunge, which operate in the agribusiness and food processing sectors. To address these challenges and maintain their competitive positions, both companies can consider diversifying their supply chains, investing in infrastructure, strengthening relationships with suppliers, developing alternative products, and leveraging technology and data.



Morgan Stanley reduced its price target for ADM to $46.00 from $48.00, while for Bunge, the target was cut to $75.00 from $85.00. The firm's analysts noted that the weaker outlook for 2025 was driven by supply risks and lower valuation multiples. For ADM, the 2025 EPS estimate was reduced to $4.00 from $4.15, while for Bunge, it was cut to $7.75 from $8.50. This slower earnings growth in the early part of the year can be attributed to various factors, such as geopolitical uncertainty, increased competition, and market volatility.

To mitigate the risks associated with the more backloaded 2025 recovery, ADM and Bunge can employ several strategies. These include diversifying their product offerings and expanding into new markets, implementing cost-cutting measures, forming strategic partnerships, and investing in research and development to create new products and improve existing ones.

In conclusion, Morgan Stanley's reduction in price targets for ADM and Bunge reflects the challenges and uncertainties facing the global agribusiness sector. By implementing the strategies outlined above, these companies can better navigate the market landscape and maintain their competitive positions in the long run. As investors, it is essential to stay informed about the latest developments in the sector and make informed decisions based on the available data and analysis.