Archer Daniels Midland CompanyADM raised its 2026 adjusted earnings outlook following a strong second quarter, supported by robust commercial and operational execution and a constructive biofuels environment. Favorable renewable-fuel economics, elevated global energy prices and improving Nutrition performance contributed to the earnings momentum. Management expects the favorable margin backdrop across its crushing and ethanol operations to continue through the second half, providing an important foundation for the upgraded outlook.
ADM now projects 2026 adjusted EPS of $5.15-$5.60, up sharply from its previous forecast of $4.15-$4.70. In the second quarter, adjusted EPS came in at $1.84, while total segment operating profit reached $1.5 billion. AS&O operating profit surged 129% year over year to $867 million, with Crushing contributing $363 million as global crush volumes increased nearly 5%. Carbohydrate Solutions operating profit advanced 22% to $411 million, aided by strong ethanol margins.
Biofuel economics remain central to ADM's growth prospects. The finalization of renewable volume obligations for 2026 and 2027 has supported domestic biofuel demand, while elevated global energy prices have strengthened crush economics. Ethanol has also benefited from favorable domestic blending economics and competitive U.S. export conditions. ADM raised its expected 2026 net benefit from the 45Z tax credit to roughly $250 million from $150 million, reflecting greater visibility into carbon-intensity verification, ethanol production and operational improvements.
Still, sustaining the earnings momentum will depend on commodity markets, energy prices, trade flows and ADM's ability to capture favorable crush margins. North American crushing was roughly 90% locked for the third quarter but only 30% for the fourth quarter, leaving greater exposure to margin volatility later in the year. Management also flagged geopolitical tensions, weather and fluctuating energy costs as external uncertainties. Nevertheless, continued strength in biofuels, disciplined execution and improving Nutrition operations could help ADM deliver within its raised 2026 earnings range.
ADM’s Zacks Rank & Share Price Performance
Shares of this Zacks Rank #1 (Strong Buy) company have gained 15.8% in the past six months, outperforming the industry, which rose 2.1%, and the broader Consumer Staples sector, which fell 5.8%.
ADM Stock's Six-Month Performance
Image Source: Zacks Investment Research
Is ADM a Value Play Stock?
From a valuation standpoint, ADM trades at a forward price-to-earnings ratio of 14.82X, higher than the industry’s average of 13.99X.
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