Value
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 3.8 |
| P/S | 10.0 |
| EV/EBITDA | 0.8 |
| Fwd P/E | 8.2 |
| PEG | 4.2 |
| Analyst target | 3.0 |
- ▸Forward P/E: 14.3x
- ▸PEG: 2.33
ADM · Why this verdict
Why Archer-Daniels-Midland (ADM) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictSELL
Overall score4.4/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Price momentum has failed the standard gate threshold, falling on-balance volume signals active distribution at current levels, and the MACD is bearish — collectively indicating that sellers are in control despite the stock holding above its long-term moving average. Momentum breakdown | RSI rises above 65 and on-balance volume turns positive for 6 consecutive weeks, confirming a shift from distribution to accumulation and restoring the momentum profile to an acceptable level. | →Stable |
| CounterMomentum signals in commodity businesses often overshoot in both directions; a positive catalyst — such as a crop yield shortfall or favorable input-cost surprise — could rapidly reverse the distribution pattern. | ||
The business quality sits below the minimum threshold for a long position, with no identified competitive moat and near-zero gross margins that leave the franchise highly exposed to commodity price cycles without a structural earnings buffer. Warnings | The Piotroski financial-health score rises to 9 out of 9 (from the current 7 out of 9) for 2 consecutive annual periods, indicating a broad-based improvement in financial health that begins to close the quality gap. | →Stable |
| CounterFree cash flow conversion of 146% of net income and a Piotroski score of 7 out of 9 demonstrate solid cash discipline and balance-sheet health; the quality shortfall may overstate the structural weakness if commodity margins stabilize. | ||
Despite weak underlying margins and no identified moat, the company has beaten consensus estimates in each of the last four quarters, averaging approximately 10% above expectations, suggesting management has been consistently under-promising and over-delivering on near-term guidance. Catalyst breakdown | The company maintains at least 3 beats in the next 4 reported quarters, with no 2 consecutive misses, demonstrating that the beat pattern reflects durable guidance discipline rather than a one-period anomaly. | →Stable |
| CounterA perfect beat streak in a commodity business can reflect favorable input-cost timing that is difficult to repeat; if commodity spreads normalize, the earnings cushion versus consensus may erode quickly. | ||
With 5.5% headroom to the near-term technical target and a reward-to-risk ratio of 0.92, the current price offers more downside exposure than potential gain, reinforcing the case for exiting the position rather than adding to it. Price targets | A pullback of sufficient magnitude restores the reward-to-risk ratio above 1.5, requiring either a meaningful decline in price or an upward revision to the technical target level that creates more than 10% headroom. | →Stable |
| CounterIf the sustained earnings beat streak drives analyst consensus targets higher, the current 5.5% headroom to the technical level could widen materially and shift the risk/reward in the buyer's favor. | ||
Price momentum has failed the standard gate threshold, falling on-balance volume signals active distribution at current levels, and the MACD is bearish — collectively indicating that sellers are in control despite the stock holding above its long-term moving average.
→StableMomentum breakdown
- Expectation
- RSI rises above 65 and on-balance volume turns positive for 6 consecutive weeks, confirming a shift from distribution to accumulation and restoring the momentum profile to an acceptable level.
CounterMomentum signals in commodity businesses often overshoot in both directions; a positive catalyst — such as a crop yield shortfall or favorable input-cost surprise — could rapidly reverse the distribution pattern.
The business quality sits below the minimum threshold for a long position, with no identified competitive moat and near-zero gross margins that leave the franchise highly exposed to commodity price cycles without a structural earnings buffer.
→StableWarnings
- Expectation
- The Piotroski financial-health score rises to 9 out of 9 (from the current 7 out of 9) for 2 consecutive annual periods, indicating a broad-based improvement in financial health that begins to close the quality gap.
CounterFree cash flow conversion of 146% of net income and a Piotroski score of 7 out of 9 demonstrate solid cash discipline and balance-sheet health; the quality shortfall may overstate the structural weakness if commodity margins stabilize.
Despite weak underlying margins and no identified moat, the company has beaten consensus estimates in each of the last four quarters, averaging approximately 10% above expectations, suggesting management has been consistently under-promising and over-delivering on near-term guidance.
→StableCatalyst breakdown
- Expectation
- The company maintains at least 3 beats in the next 4 reported quarters, with no 2 consecutive misses, demonstrating that the beat pattern reflects durable guidance discipline rather than a one-period anomaly.
CounterA perfect beat streak in a commodity business can reflect favorable input-cost timing that is difficult to repeat; if commodity spreads normalize, the earnings cushion versus consensus may erode quickly.
With 5.5% headroom to the near-term technical target and a reward-to-risk ratio of 0.92, the current price offers more downside exposure than potential gain, reinforcing the case for exiting the position rather than adding to it.
→StablePrice targets
- Expectation
- A pullback of sufficient magnitude restores the reward-to-risk ratio above 1.5, requiring either a meaningful decline in price or an upward revision to the technical target level that creates more than 10% headroom.
CounterIf the sustained earnings beat streak drives analyst consensus targets higher, the current 5.5% headroom to the technical level could widen materially and shift the risk/reward in the buyer's favor.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Archer-Daniels-Midland carries a quality profile below the minimum investable threshold — with no identified competitive moat and near-zero gross margins — and is experiencing negative price momentum including falling on-balance volume, even as the company has delivered four consecutive earnings beats averaging approximately 10% above consensus; the risk/reward of 0.92 is unfavorable and the position warrants exit.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
3.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.6 |
| ROA | 1.1 |
| Gross margin | 0.0 |
| Op margin | 0.5 |
| Net margin | 0.7 |
| Current ratio | 4.9 |
| FCF quality | 9.9 |
| Moat | 4.5 |
| Piotroski F | 7.8 |
- ▸Excellent cash conversion: 146% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 7/9
Growth
2.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.9 |
| EPS growth | 2.2 |
Momentum
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 7.6 |
| MACD | 2.0 |
| OBV | 10.0 |
| MA position | 4.0 |
| Volume | 0.0 |
- ▸Uptrend pullback (RSI 39) - buy opportunity
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
4.8/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 4.4 |
| erm sentiment | 5.0 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
3.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.1 |
| quality rank | 4.4 |
| growth rank | 2.5 |
Technical
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 5.0 |
| support resistance | 4.7 |
| 52w position | 8.2 |
Risk (lower is worse)
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.0 |
| days to cover | 6.4 |
| volatility | 6.0 |
| put call | 3.0 |
| implied vol | 6.4 |
| max pain risk | 3.0 |
| beta | 9.3 |
| debt equity | 8.2 |
- ▸Elevated put/call: 1.56
- ▸Above max pain $55
Catalyst
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 7.7 |
| dividend safety | 3.5 |
- ▸Perfect beat streak: 4Q
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (6)
- MOMENTUM:4.7>=4.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:30d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-2.1=NEGATIVE
Warning (2)
- MOMENTUM:4.7<5.5 (soft — BUY_NOW allowed but watch)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-2.10
Upside
-16.5%
Downside
7.9%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Risk (lower is worse) at 6.3 could not lift the engine output above the verdict floor. Failed gate signal: ASYMMETRY:-2.1=NEGATIVE.
The strongest dimensions are Risk (lower is worse) at 6.3, Catalyst at 6.2, and Technical at 6.0; the weakest are Growth at 2.5, Quality at 3.4, and Peer rank at 3.8. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of -2.10 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Quality Below Minimum Threshold
Trip ifPiotroski F-Score rises to 9 out of 9 for 2 consecutive annual assessments, indicating broad-based improvement across financial health dimensions.
- P2Earnings Beats Amid Weak Fundamentals
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P3Negative Momentum Distribution
Trip ifRSI rises above 65 and on-balance volume turns positive for 6 consecutive weeks, confirming the distribution phase has reversed.
- P4Unfavorable Reward Risk Geometry
Trip ifReward-to-risk ratio rises above 1.5, requiring the technical take-profit target to be revised more than 10% above the current level or the price to pull back more than 8% from current levels.