A strong stock as of late has been Archer Daniels Midland (ADM). Shares have been marching higher, with the stock up 4.1% over the past month. The stock hit a new 52-week high of $83.6 in the previous session. ADM has gained 43.4% since the start of the year compared to the 4.9% gain for the Zacks Consumer Staples sector and the 19.7% return for the Zacks Agriculture - Operations industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on May 5, 2026, ADM reported EPS of $0.71 versus consensus estimate of $0.66 while it missed the consensus revenue estimate by 2.93%.
For the current fiscal year, ADM is expected to post earnings of $4.54 per share on $85.44 in revenues. This represents a 32.36% change in EPS on a 6.45% change in revenues. For the next fiscal year, the company is expected to earn $4.99 per share on $87.26 in revenues. This represents a year-over-year change of 9.87% and 2.12%, respectively.
Valuation Metrics
While ADM has moved to its 52-week high in the recent past, investors need to be asking, what is next for the company? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). The individual style scores for Value, Growth, Momentum and the combined VGM Score run from A through F. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
ADM has a Value Score of A. The stock's Growth and Momentum Scores are B and F, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 18.2X current fiscal year EPS estimates, which is a premium to the peer industry average of 12.9X. On a trailing cash flow basis, the stock currently trades at 13.9X versus its peer group's average of 6.8X. This is good enough to put the company in the top echelon of all stocks we cover from a value perspective, making ADM an interesting choice for value investors.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, ADM currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if ADM passes the test. Thus, it seems as though ADM shares could still be poised for more gains ahead.
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Archer Daniels Midland Company (ADM): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).