Archer Daniels Midland Company ADM is slated to release fourth-quarter 2024 results on Feb. 4, before the opening bell. The Zacks Consensus Estimate for revenues is pegged at $21.9 billion, suggesting a decrease of 4.6% from the prior-year quarter.

The consensus estimate for earnings is pegged at $1.07 per share, which indicates a plunge of more than 21% from the year-ago quarter’s figure. Also, the metric has moved down by a penny in the past 30 days. ADM delivered a negative earnings surprise of 6.5% in the last reported quarter.

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Key Factors to Influence ADM’s Upcoming Results

One of the key factors contributing to Archer Daniels' struggles is the underperformance in its Ag Services & Oilseeds segment. This segment has been witnessing a significant decline in both revenues and adjusted operating profit. Operating profit for the Ag Services segment has been affected by weak farmer selling and increased logistics costs.

Also, the Crushing sub segment is expected to be impacted by high canola seed prices and weaker overall results, despite strong soybean crush margins in EMEA. Moreover, the Refined Products & Other sub segment is expected to be impacted by softness in North America, driven by increased imports of used cooking oil and higher pretreatment capacity, which is likely to result in lower refining and biodiesel margins. These factors are expected to have weighed on revenues in the to-be-reported quarter.

On the last reported quarter’s earnings call, management anticipates lower year-over-year segment operating profit in Ag Services & Oilseeds for the fourth quarter of 2024. The improved environment in Ag Services is likely to be more than offset by weak margins in Crushing and Refined Products & Other.

The Zacks Consensus Estimate for adjusted operating profit for Ag Services & Oilseeds is pegged at $630 million, including $168 million for Ag Services, $253 million for Crushing and $122 million for Refined Products and Other sub-segments. The consensus estimate for Ag Services & Oilseeds revenues is pegged at $17.2 billion.

However, ADM has been focused on optimizing the organizational and operational structure across the Human and Animal Nutrition. These are likely to produce cost benefits in the to-be-reported quarter. On the last reported quarter’s earnings call, management stated that it remains optimistic about the Nutrition segment, thanks to the cyclical improvement across its broader portfolio, flavors, health and wellness and animal nutrition. In Nutrition, management expects the fourth-quarter operating profit to be higher year over year.

The Zacks Consensus Estimate for operating profit for the Nutrition segment is pegged at $85 million, including $15.4 million for Animal Nutrition and $70 million for Human Nutrition sub-segments. The consensus estimate for Nutrition segment revenues is pegged at $1.7 billion.

ADM has been creating additional margin opportunities, opening channels to customers, advancing digital technologies in areas like farmer needs, extending Regen Act programs and partnerships, and growing its BioSolutions platform. It expects a major portion of its planned $500 million cost savings from the execution excellence to be generated by the end of this initial year of the program. The company has been seeing solid demand for meals and oil. Gains from these efforts and trends should be reflected in the company’s fourth-quarter 2024 results.

What the Zacks Model Unveils for ADM Stock

Our proven model does not conclusively predict an earnings beat for Archer Daniels this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks before they are reported with our Earnings ESP Filter.

Archer Daniels currently has an Earnings ESP of -2.17% and a Zacks Rank #3.

ADM’s Valuation Picture & Price Performance

From a valuation perspective, Archer Daniels offers an attractive opportunity, trading at a discount relative to historical and industry benchmarks. With a forward 12-month price-to-earnings ratio of 10.93, which is below the five-year high of 11.96x and the Agriculture - Operations industry’s average of 14.16x. At this level, the stock offers compelling value for investors seeking exposure to this sector.

The recent market movements show that ADM shares have declined 19.1% in the last six months compared with the industry's 1.0% fall.

ADM Stock's Past Six-Month Perfromance

Image Source: Zacks Investment Research

Stocks With the Favorable Combination

Here are companies that, according to our model, have the right combination of elements to beat on earnings this reporting cycle.

Church & Dwight CHD currently has an Earnings ESP of +0.11% and a Zacks Rank of 3. The Zacks Consensus Estimate for fourth-quarter 2024 EPS is pegged at 77 cents, which implies a roughly 18.5% increase year over year. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Church & Dwight’s quarterly revenues is pegged at $1.56 billion, which indicates growth of 2.4% from the figure reported in the prior-year quarter. CHD has a trailing four-quarter earnings surprise of roughly 10%, on average.

Tyson Foods, Inc. TSN currently has an Earnings ESP of +3.36% and a Zacks Rank of 2. The Zacks Consensus Estimate for first-quarter fiscal 2025 EPS is pegged at 79 cents, which implies a 14.5% increase year over year.

The Zacks Consensus Estimate for Tyson Foods’ quarterly revenues is pegged at $13.5 billion, which indicates growth of 1.2% from the figure reported in the prior-year quarter. TSN has a trailing     four-quarter earnings surprise of roughly 57%, on average.

Sysco Corporation SYY currently has an Earnings ESP of +0.38% and a Zacks Rank of 3. The Zacks Consensus Estimate for second-quarter fiscal 2025 EPS is pegged at 93 cents, which implies a roughly 4.5% increase year over year.

The Zacks Consensus Estimate for Sysco’s quarterly revenues is pegged at $20.1 billion, which indicates growth of 4.2% from the figure reported in the prior-year quarter. SYY has a trailing negative four-quarter earnings surprise of roughly 0.2%, on average.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Archer Daniels Midland Company (ADM) : Free Stock Analysis Report

Church & Dwight Co., Inc. (CHD) : Free Stock Analysis Report

Tyson Foods, Inc. (TSN) : Free Stock Analysis Report

Sysco Corporation (SYY) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research