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Factors to Influence Archer Daniels (ADM) This Earnings Season

Archer Daniels Midland Company ADM is slated to report fourth-quarter 2021 results on Jan 25, before market open. The leading agricultural product company is likely to have witnessed earnings and revenue growth in the to-be-reported quarter.

The Zacks Consensus Estimate for the company’s fourth-quarter earnings is pegged at $1.36 per share, which suggests an increase of 12.4% from the year-ago quarter’s reported figure. The consensus mark has moved up 8.8% in the past seven days. For fourth-quarter revenues, the consensus mark is pegged at $20.4 billion, suggesting 13.3% growth from the prior-year quarter’s reported figure.

In the last reported quarter, the company delivered an earnings surprise of 6.6%. Its earnings outperformed the Zacks Consensus Estimate by 23.4% on average, in the trailing four quarters.

Archer Daniels Midland Company Price and EPS Surprise

 

Archer Daniels Midland Company price-eps-surprise | Archer Daniels Midland Company Quote

Key Factors to Note

Archer Daniels has been gaining from solid demand and continued growth in the Nutrition segment. Significant gains in the Human and Animal Nutrition units have been aiding the Nutrition business. The trends are expected to have continued in the fourth quarter.

Within the Human Nutrition unit, the North America and EMEA regions have been benefiting from the strength in the flavors business, stemming from higher volumes and better product mix, particularly in the beverage category. Sales growth in alternative proteins is likely to have aided the Specialty Ingredients unit. In contrast, robust sales in bioactives and fiber are expected to have contributed to the Health & Wellness category.

The Animal Nutrition unit is expected to have witnessed continued positive demand in amino acids, and strength in feed additives and ingredients. The company’s recent buyouts and joint ventures are expected to have leveraged the rising demand for pet food, sustainable fuel and plant-based products, in turn, aiding the fourth-quarter performance.

The company has been making efforts to expand its solutions portfolio, which forms part of its Carbohydrate Solutions unit. Such endeavors are expected to have aided the company’s top line in the quarter under review.

However, Archer Daniels remains exposed to headwinds, including higher performance-related compensation, project-related costs, and the shifting of costs from business segments into the centralized centers of excellence in the supply chain and operations.

On its last reported quarter’s earnings call, management warned about higher manufacturing costs in the Carbohydrates Solutions and Ag Services & Oilseeds segments in the fourth quarter of 2021.

What the Zacks Model Unveils

Our proven model conclusively predicts an earnings beat for Archer Daniels this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Archer Daniels has a Zacks Rank #3 and an Earnings ESP of +2.88%.

Other Stocks With Favorable Combination

Here are some more companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:

Hormel Foods HRL currently has an Earnings ESP of +1.27% and a Zacks Rank of 3. The company is likely to register an increase in the bottom line when it reports first-quarter fiscal 2022. The Zacks Consensus Estimate for quarterly earnings has moved by a penny to 47 cents per share in the past 30 days, suggesting a 14.6% rise from the year-ago quarter’s reported number. You can see the complete list of today’s Zacks #1 Rank stocks here.

Hormel Foods’ top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $2.95 billion, which suggests a rise of 19.8% from the figure reported in the prior-year quarter. HRL has delivered an earnings beat of 1.8%, on average, in the trailing four quarters.

Beyond Meat BYND currently has an Earnings ESP of +0.69% and a Zacks Rank of 3. The company is likely to register an increase in the bottom line when it reports fourth-quarter 2021. The Zacks Consensus Estimate for quarterly earnings has been unchanged at a loss of 73 cents per share, indicating a 114.7% decline from the year-ago quarter’s reported number.

However, Beyond Meat’s top line is expected to rise year over year. The Zacks Consensus Estimate for BYND’s quarterly revenues is pegged at $104 million, which suggests a rise of 2% from the figure reported in the prior-year quarter.

Hershey HSY currently has an Earnings ESP of +0.90% and a Zacks Rank of 3. The company is likely to register an increase in the bottom line when it reports fourth-quarter 2021. The Zacks Consensus Estimate for quarterly earnings has moved by 1.2% to $1.63 per share in the past 30 days, projecting a 9.4% rise from the year-ago quarter’s reported number.

Hershey’s top line is also expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $2.2 billion, which suggests a rise of 2.6% from the figure reported in the prior-year quarter. HSY has delivered an earnings beat of 4.4%, on average, in the trailing four quarters.


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Hershey Company The (HSY): Free Stock Analysis Report
 
Archer Daniels Midland Company (ADM): Free Stock Analysis Report
 
Hormel Foods Corporation (HRL): Free Stock Analysis Report
 
Beyond Meat, Inc. (BYND): Free Stock Analysis Report
 
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