Archer-Daniels-Midland Company (NYSE:ADM) has had a great year, with the stock surging almost 32%, compared with the S&P 500’s 15% return. Earnings have started to recover, and investors have noticed. The stock is up as well. That leaves investors with a fairly simple question: after the recovery, is ADM still reasonably valued?
ADM’s Biggest Advantage Is Its Scale
Archer-Daniels-Midland Company (NYSE:ADM) does not have the kind of moat that comes from owning brands people see on grocery store shelves. Its advantage is much less visible. The company has built a huge network spanning agricultural origination, transportation, processing, biofuels, food ingredients, and nutrition. That gives ADM the ability to move commodities through different parts of the supply chain and make money from several stages of the process.
The benefit of that scale showed up in the latest results. In Q2 2026, operating profit from Ag Services & Oilseeds jumped 129% from a year earlier. Carbohydrate Solutions and Nutrition were up 22% and 51%, respectively. ADM also pointed to its global asset network as an advantage in dealing with a complicated agricultural market. There is a catch, though. This is still a cyclical business. ADM’s margins can move around quite a bit depending on crop prices, energy costs, trade policies, and biofuel markets. So while the company’s scale gives it an edge, it does not make the business immune to industry cycles.
Trailing vs. Forward P/E
Archer-Daniels-Midland Company (NYSE:ADM) looks expensive if you only look at its trailing P/E. At around $80.45 a share, the stock trades at roughly 22 times trailing earnings, based on diluted EPS of about $3.66. However, that number doesn’t tell the whole story. ADM expects earnings to improve significantly in 2026. The company raised its adjusted EPS guidance to $5.15-$5.60, up from $4.15-$4.70 previously. Using the midpoint of the new guidance, ADM is trading at roughly 15 times 2026 adjusted earnings.
That is a pretty big difference. Investors are not necessarily paying 22 times earnings because they think ADM’s current earnings are worth that much. They are looking past the weaker trailing results and betting that the recovery continues. At about 15 times expected earnings, the valuation looks much more reasonable.
But ADM Isn’t as Cheap as It Used to Be
The problem is that ADM’s current forward P/E is already toward the higher end of its recent range. ADM’s forward P/E was around 15.0x in 2025, 10.9x in 2024, 11.0x in 2023, 14.1x in 2022, and 14.5x in 2021. At roughly 15x today, investors are paying more than they did in several of those years. That doesn’t automatically make ADM expensive. However, it does tell us something important: the market has already priced in a decent part of the earnings recovery. If earnings keep improving, the valuation could prove reasonable. If the recovery loses steam, the stock has less of a cushion.
