Regulatory Delays and Weakening Margins Weigh on Morgan Stanley’s ADM Outlook

Archer-Daniels-Midland Company (NYSE:ADM) is included among the 12 Best Income Stocks to Buy Now.

Regulatory Delays and Weakening Margins Weigh on Morgan Stanley’s ADM Outlook

On December 16, Morgan Stanley analyst Steven Haynes downgraded Archer-Daniels-Midland Company (NYSE:ADM) to Underweight from Equal Weight and cut the price target to $50 from $57. The firm said expectations tied to the Environmental Protection Agency’s renewable volume obligation now stretch into 2026, masking additional downside risk in ADM’s Carb Solutions unit as margins weaken. Morgan Stanley described the setup for the shares as unfavorable.

The downgrade comes even after a strong start to the year. Archer-Daniels-Midland Company (NYSE:ADM) shares are up more than 15% since early 2025. That rally has not been backed by earnings momentum. In November, the company lowered its 2025 profit outlook for the third straight quarter. Management pointed to ongoing uncertainty around US biofuel policy and global trade disruptions, both of which have weighed on oilseed crush margins. ADM and other agribusiness firms have felt steady pressure as ample global crop supplies and volatile commodity markets continue to squeeze profitability.

The strain showed up clearly in the latest results. Profit in Archer-Daniels-Midland Company (NYSE:ADM)’s agricultural services and oilseed segment, its largest business, dropped 21% in the third quarter to $379 million. A 93% collapse in crushing profits more than offset strength in corn and soymeal exports.

Looking ahead, ADM now expects adjusted earnings of $3.25 to $3.50 per share in 2025. That compares with its earlier forecast of about $4.00 and falls below analysts’ estimate of $3.79 per share. If those numbers hold, it would mark the company’s weakest earnings since 2019.

Archer-Daniels-Midland Company (NYSE:ADM) is a global food-processing and commodities-trading company headquartered in Chicago, Illinois.

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