Shares of Archer Daniels Midland Company
“[T]he full impact of the Presidential election result is hard to quantify at this point; however, we believe that the risks to US agriculture are now skewed to the downside,” analyst Ann Duignan wrote in a note.
Duigan believes a strong U.S. dollar versus South American currencies would weigh on
The analyst also noted that corn processing could be hurt by a weaker Mexican peso. Further, weaker economic growth could negatively impact exports into Mexico, which is the third largest export market for US agriculture.
“[T]he value of ADM’s ethanol dry mill assets could be reduced given heightened risks to demand (domestically and in terms of exports), this could negatively impact ADM’s ability to sell the dry mill assets in the near term,” Duigan highlighted.
Meanwhile, the expiry of biodiesel tax incentive at the end of 2016 may weigh on soybean crush margins into 2017.
Duigan also cut the price target by $6 to $36 on the shares, which lost 5.2 percent in the last two days. The analyst expects the stock to be under continued pressure as the impact of actual policy starts to weigh on the company’s core businesses.
|Nov 2016||JP Morgan||Downgrades||Neutral||Underweight|
|Aug 2016||Argus Research||Upgrades||Hold||Buy|
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