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ADM Raises 2026 EPS View: Can Biofuel Strength Sustain Growth?
Archer Daniels Midland Company ADM raised its 2026 adjusted earnings outlook following a strong second quarter, supported by robust commercial and operational execution and a constructive biofuels environment. Favorable renewable-fuel economics, elevated global energy prices and improving Nutrition performance contributed to the earnings momentum. Management expects the favorable margin backdrop across its crushing and ethanol operations to continue through the second half, providing an important foundation for the upgraded outlook.
ADM now projects 2026 adjusted EPS of $5.15-$5.60, up sharply from its previous forecast of $4.15-$4.70. In the second quarter, adjusted EPS came in at $1.84, while total segment operating profit reached $1.5 billion. AS&O operating profit surged 129% year over year to $867 million, with Crushing contributing $363 million as global crush volumes increased nearly 5%. Carbohydrate Solutions operating profit advanced 22% to $411 million, aided by strong ethanol margins.
Biofuel economics remain central to ADM's growth prospects. The finalization of renewable volume obligations for 2026 and 2027 has supported domestic biofuel demand, while elevated global energy prices have strengthened crush economics. Ethanol has also benefited from favorable domestic blending economics and competitive U.S. export conditions. ADMADM-- raised its expected 2026 net benefit from the 45Z tax credit to roughly $250 million from $150 million, reflecting greater visibility into carbon-intensity verification, ethanol production and operational improvements.
Still, sustaining the earnings momentum will depend on commodity markets, energy prices, trade flows and ADM's ability to capture favorable crush margins. North American crushing was roughly 90% locked for the third quarter but only 30% for the fourth quarter, leaving greater exposure to margin volatility later in the year. Management also flagged geopolitical tensions, weather and fluctuating energy costs as external uncertainties. Nevertheless, continued strength in biofuels, disciplined execution and improving Nutrition operations could help ADM deliver within its raised 2026 earnings range.
ADM’s Zacks Rank & Share Price Performance
Shares of this Zacks Rank #1 (Strong Buy) company have gained 15.8% in the past six months, outperforming the industry, which rose 2.1%, and the broader Consumer Staples sector, which fell 5.8%.
ADM Stock's Six-Month Performance
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Is ADM a Value Play Stock?
From a valuation standpoint, ADM trades at a forward price-to-earnings ratio of 14.82X, higher than the industry’s average of 13.99X.
ADM P/E Ratio (Forward 12 Months)
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Other Stocks to Consider
Darling Ingredients Inc. DAR, which is a global developer and producer of sustainable natural ingredients, currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Darling Ingredients' current financial-year sales indicates growth of 12.7% from the prior-year level. DAR delivered a trailing four-quarter earnings surprise of 38.9%, on average.
The Coca-Cola Company KO is a leading beverage company with a portfolio of 32 billion-dollar brands spanning sparkling beverages, water, sports drinks, dairy and value-added beverages. KO currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Coca-Cola’s current fiscal-year sales and earnings implies growth of 3.8% and 9.7%, respectively, from the year-ago reported figures. Coca-Cola delivered a trailing four-quarter earnings surprise of 4.6%, on average.
Primo Brands Corporation PRMB is a leading North American branded beverage company focused on healthy hydration. It currently has a Zacks Rank #2.
The Zacks Consensus Estimate for Primo Brands’ current fiscal-year sales indicates growth of 2.4% from the prior year’s reported levels. PRMB delivered a trailing four-quarter earnings surprise of 7.7%, on average.
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Archer Daniels Midland Company (ADM): Free Stock Analysis Report
CocaCola Company (The) (KO): Free Stock Analysis Report
Darling Ingredients Inc. (DAR): Free Stock Analysis Report
Primo Brands Corporation (PRMB): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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