Archer Daniels Midland Company ADM has been facing pressure from its investment in Wilmar International for a while now. The company reported a 22% year-over-year decline in equity earnings from its investment in Wilmar International to $60 million in the second quarter of 2026 compared with $77 million in the prior-year quarter. The decline raises questions about the sustainability of earnings from this investment, even as ADM delivered strong overall quarterly results.
Wilmar International, a Singapore-based agribusiness company, operates across palm oil, edible oils, oilseeds, grains, sugar and food products. Its earnings are sensitive to fluctuations in commodity prices, processing margins, demand trends and operating costs. Changes in these factors can influence Wilmar’s profitability and, in turn, the equity earnings ADM receives from its investment.
Notably, ADM's broader business benefited from favorable market conditions during the quarter. The company's Ag Services and Oilseeds segment recorded higher operating profits, supported by improved commercial execution, stronger South American performance and favorable biofuel-related crushing margins. Global oilseed processing volumes increased nearly 5% year over year. However, these positive developments did not prevent Wilmar's earnings from declining.
The decline in Wilmar’s earnings could indicate pressure on margins or unfavorable conditions across certain agricultural commodity markets. Fluctuations in raw material prices, changes in demand for food products and shifts in global trade flows can influence processing volumes and profitability.
For ADM, Wilmar’s earnings trajectory remains an important factor in evaluating the investment’s contribution to overall results. Investors should monitor Wilmar’s earnings, commodity price trends and processing margins to gauge the outlook for this investment. An improvement in Wilmar’s profitability could boost ADM’s equity earnings, while persistent weakness may limit the contribution despite stronger performance in other business segments. Until a sustained recovery becomes evident, subdued earnings from Wilmar could remain a headwind for ADM’s overall earnings outlook.
ADM’s Peers
Dole plc DOLE is benefiting from steady demand for fresh produce, disciplined pricing strategies and improved operational efficiency. DOLE is strengthening its vertically integrated supply chain through investments in farming operations, packing facilities, ripening centers and logistics infrastructure. These initiatives are supporting cost efficiencies, enhancing product quality and improving supply reliability. Dole is also expanding its presence in high-growth categories, such as cherries and citrus, by increasing production capacity and modernizing packing facilities to meet rising customer demand and capture additional growth opportunities.
Adecoagro S.A. AGRO is a leading South American agribusiness and renewable energy company with a growing presence across agricultural and consumer markets. AGRO's ability to adjust the production mix between sugar and ethanol in response to changing market conditions provides operational flexibility and helps optimize profitability. Adecoagro is also adopting digital technologies, renewable energy solutions and precision agriculture practices to improve productivity, streamline operations and manage costs more effectively.
ADM’s Price Performance, Valuation and Estimates
Archer Daniels shares have gained 16.2% in the past six months compared with the industry’s 0.4% drop.
Image Source: Zacks Investment Research
From a valuation standpoint, ADM trades at a forward price-to-earnings ratio of 14.29X compared with the industry’s average of 11.67X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for ADM’s 2026 and 2027 earnings per share (EPS) indicates year-over-year growth of 58.9% and 3.4%, respectively. The company’s EPS estimate for 2026 and 2027 has increased in the past 30 days.
Image Source: Zacks Investment Research
Archer Daniels currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
Of course, all our elite picks aren't winners, but this one could far surpass earlier Zacks' Stocks Set to Double like D-Wave Quantum, which shot up +680.1%.
Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Archer Daniels Midland Company (ADM): Free Stock Analysis Report
Dole PLC (DOLE): Free Stock Analysis Report
Adecoagro S.A. (AGRO): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).