2023-12-06 09:20:00 ET
The Archer-Daniels-Midland Company (NYSE:ADM) is A-rated on value and growth investment styles. The stock has a B rating on momentum. The ratings confirm ADM as a good value stock to hold. Further, the growth rating indicates the affirmed firm’s likelihood to outperform the market. True to the ratings, ADM continues to post spectacular performances.
ADM beat EPS projections for quarters in a row. On average, the EPS posted by the company exceeded analyst projections by $0.30. As we approach the end of the fiscal year, the expectation is that ADM will continue with the earnings beating momentum. That will drive the share price up.
The food stock is trading at $74. Market performance metrics place the forward PE at 10.28x, compared to the previous year’s PE of 7.85x. The PEG ratio is at 1.61x. All indications are that ADM shares are undervalued. Buying ADM at the current level is acquiring value for less than market risk, considering the beta of 0.82.
ADM is about to rally as 10-day and 20-day averages rise above the 50-day average
Technical analysis shows a cyclical pattern in the price of ADM. At the prevailing price, ADM is trading at the bottom of the trough in its cycle. The general trend points to expectations of price appreciation. The target price is about $92.
We recommend buying at $74, considering the buy signal triggered on the MACD. From the price chart above, it is clear that the 10-day average is trending above the 20-day average. The 50-day average dipped below the 50-day. Convergence with the 200-day average from below can be expected in the coming days.
ADM has support at $74. Therefore, the price is unlikely to dip below the current level. We affirm this is the best time to buy and accumulate the shares.
Summary
ADM could hit its target price of $92 before earnings release in the new year. The best time to invest and accumulate the stock is now. The fundamental and technical indicators are in sync. Buying now creates the opportunity to lock in value and benefit from potential price appreciation.
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