Archer-Daniels Midland (ADM) 2024 Valuation Model and Risk Framework

Archer-Daniels Midland (ADM): An Overreaction?
 
This Archer-Daniels Midland (ADM) valuation model includes a detailed operating model with scenario toggle, DCF valuation (sum-of-the-parts SOTP), comparable company analysis, historical financials, projections, and segment build. Assumptions can easily be adjusted by the user. 
 
The company trades at an 7.5x fwd 2023e P/E ratio and is the cheapest name in its peer group after the CFO was let go last week due to accounting impropriety with respect to inter-segment cost accounting. Interestingly, the Nutritional Segment, which is where the issues were is only 7.5% of total sales. In addition, the company reaffirmed FY23 EPS guidance at >$6.90/share, and CEO Juan Luciano sent a letter to employees on Friday to ensure them the business had intersegment sales won't 'materially affect results'.
 
The company will also delay paying executive performance bonuses until its delayed financial statements are completed and audited, according to a staff memo on 1/29/24. This aligns incentives, and makes sure we see 4Q23 results soon.
 
Once you have downloaded the model, e-mail us for the associated memo for 2024.
 
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