ADM – Market expectations are for record-high Uniform ROA, but management’s concerns about ROIC growth and their savings targets imply this may be unwarranted

October 23, 2017

  • Archer-Daniels-Midland Company (ADM:USA) currently trades above historical averages relative to UAFRS-based (Uniform) Assets, with a 1.0x Uniform P/B, implying somewhat bullish expectations for the firm. However, given management’s concerns about profitability, this may be unwarranted
  • Specifically, management appears concerned about the sustainability of ROIC growth, and may lack confidence in their ability to achieve their run-rate savings targets for 2017 and 2018, as well as their ability to meet operating cash flow expectations. Should the firm fail to drive Uniform ROA to record-highs, as management sentiment suggests, multiple compression and equity downside would be warranted

You don’t have access to the Valens Research Premium Application.

To get access to our best content including the highly regarded Conviction Long List and Market Phase Cycle macro newsletter, please contact our Client Relations Team at 630-841-0683 or email

Please fill out the fields below so that our client relations team can contact you

Or contact our Client Relationship Team at 630-841-0683