Morgan Stanley Provides Color On Archer Daniels Midland (ADM)

Morgan Stanley provided color on Archer Daniels Midland ADM in a research report published today. Morgan Stanley remains optimistic on Archer Daniels Midland after its Q1 results. In the report, Morgan Stanley states, "We believe that unequivocally tight Global Ag fundamentals present an asymmetrically positive risk/reward for ADM and we expect more good quarters than bad quarters going forward. We continue to believe that normalized EPS is comfortably above $3 (even if you assume run-rate Ag Services quarterly PBT is just $175mm) and that ADM's valuation will improve over time as numbers indicative of this earnings power continue to come in (i.e., ADM is 19% above where it troughed after a “disappointing” F4Q10, up 6% since the “home run” F1Q11 but is still 27% below its prior cycle peak despite both a higher level and higher quality of gross earnings and, in our view, a more sustainable long term opportunity set." In yesterday's trading, Archer Daniels Midland plunged 6.73% to end the day at $34.51. Its shares regained some of yesterday's losses in today's pre-market trading, after gaining 0.99% to trade at $34.85.