Archer-Daniels-Midland Stock Pushed Higher on Analyst Praise

J.P. Morgan and Credit Suisse both upped their price targets as well

Deputy Editor
Oct 19, 2020 at 10:48 AM
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The shares of Archer-Daniels-Midland Company (NYSE:ADM) are up 2.4% at $50.98 at last check, after analysts chimed in with praise. J.P. Morgan upgraded the stock to "overweight" from "neutral," with a price-target hike to $60 from $45. The firm cited the food processing company's "resilient Nutrition OP growth through the pandemic," China's heightened U.S. agriculture purchases, as well as positive near-term and long-term expectations ahead of its third-quarter earnings report, due out next week. Furthermore, Credit Suisse upped its price target to $44 from $39. 

On the charts, ADM just broke past pressure at the $50 mark, extending Friday's rally to capture a fresh two-year high this morning. Fresh off its third-straight weekly win, the equity is up 10% year-to-date, with solid support at its 20- and 40-day moving averages. 

Analysts were already leaning bullish coming into today, with six of the 11 in coverage sporting a "strong buy" rating on ADM. Meanwhile, the 12-month consensus price target of $51.60 is just a chip-shot away from current levels. 

The options pits are of similar sentiment, with 3.69 calls bought for every put in the last 10 days at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio stands higher than 79% of readings from the past year, meaning calls are more popular amongst options traders than usual. 

Also worth noting, the stock's Schaeffer's Volatility Index (SVI) of 30% stands higher than just 12% of all other readings in its annual range, implying that options players are pricing in relatively low volatility expectations at the moment. This makes it a good time to weigh in on ADM's next move with options. 


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