ADM
Archer-Daniels-Midland Company
$79.36
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 65.7% above fair value
You pay
$79.36
Bear
$38.32
Fair
$47.90
Bull
$57.48
Bear
$38.32
-51.7%
$4.79 × 8x P/E
Fair
$47.90
-39.6%
$4.79 × 10x P/E
Bull
$57.48
-27.6%
$4.79 × 12x P/E
Adjust Assumptions
10.0x
4.79$
Key Value Driver
Normalized P/E multiple (10x base case)
Implied Market Multiple
16.6x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (36 analysts)
$84.75
Divergence from AlphaVal
43%
Summary
Applying a 10x P/E to adjusted EPS of $4.79, the base-case value is $47.90 per share. DDM cross-check: $94.51.
Warnings
The company's reported profits differ from official accounting profits by 115%. Check what costs are being left out of the adjusted number.
The company pays out 93% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Dividend-based valuation: $94.51 (above our primary estimate by 97%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $84.75 (from 36 analysts). Our estimate is 43% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples