Archer Daniels Midland Co.’s stock slipped Friday as an analyst downgraded the agribusiness conglomerate, saying the current operating environment may miss near- and intermediate-term expectations.
Kenneth Zaslow of BMO Capital Markets said in a client note that ethanol and oilseed crush margins may not meet some of the company’s benchmarks, partly because Archer Daniels Midland had “good positioning” over the past several quarters.
Corn is also a concern, with Zaslow saying the company may have to reduce inventory at lower prices over the next one to two quarters.
Last month Archer Daniels Midland reported that its fiscal second-quarter profit jumped 29 percent as a recovery in the ethanol industry and growing demand for grains boosted revenue and profit margins.
Archer Daniels Midland’s operations range from processing crops to making ethanol and shipping food exports.
Zaslow cut the company’s rating to “Market Perform” from “Outperform.”
Shares of Archer Daniels Midland, based in Decatur, Ill., fell 81 cents, or 2.2 percent, to $35.26 in morning trading. Over the past year, the stock has traded between $24.22 and $38.02.
