Archer-Daniels-Midland Company (ADM) DCF Valuation
TGM's two-stage DCF values Archer-Daniels-Midland Company (ADM) between $68.10 and $146.14 depending on assumptions, with a base case of $97.87. Growth is taken from the company's own record (5-year revenue CAGR (FCF growth too volatile to use)), fading to 2.5% long-run; the discount rate (7.5%) reflects its beta.
What would today's price require?
$75.08 is justified only if free cash flow grows about -1.8% a year (fading to 2.5% long-run) at a 7.5% required return — slower than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 0.5%/yr | 8.5% | $68.10 |
| Base case | 3.4%/yr | 7.5% | $97.87 |
| Optimistic | 6.4%/yr | 6.5% | $146.14 |
| Analyst DCF (FMP) | independent reference — different model | $64.31 | |
Current Price
$75.08
Market-Implied Growth
-1.8%/yr
vs +3.4% 5Y actual
Model Scenario Range
$68.10 – $146.14
model output — not a price target
ADM DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for ADM (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $2.6B · 0.48B shares · net debt $7.4B
Estimated Fair Value
$101.74
+35.5% vs $75.08
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 3.4%/yr FCF growth and 10-year horizon fixed. Green = above today's $75.08; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 5.5% | $143 | $159 | $181 | $211 | $257 |
| 6.5% | $110 | $120 | $131 | $146 | $167 |
| 7.5% | $88.82 | $94.69 | $102 | $110 | $121 |
| 8.5% | $73.48 | $77.40 | $81.97 | $87.37 | $93.85 |
| 9.5% | $62.00 | $64.74 | $67.86 | $71.47 | $75.68 |
About Archer-Daniels-Midland Company
Archer-Daniels-Midland Company (ADM) stands as a major global enterprise in the agricultural sector, focused on the sourcing, transportation, storage, processing, and distribution of a wide array of agricultural commodities, finished goods, and essential ingredients. Its expansive operations span numerous countries, including pivotal markets such as the United States, Switzerland, the Cayman Islands, Brazil, Mexico, and the United Kingdom, alongside a broader international presence. ADM's business is strategically organized into three core divisions: Ag Services and Oilseeds, Carbohydrate Solutions, and Nutrition. The company's foundational activities involve acquiring, storing, cleaning, and distributing various agricultural raw materials, including oilseeds, corn, wheat, milo, oats, and barley. Beyond raw material handling, ADM is actively engaged in the global import, export, and distribution of agricultural commodities and feed products, complemented by specialized structured trade finance services. The company's product portfolio is incredibly diverse, serving the food, animal feed, energy, and industrial sectors. Offerings include a comprehensive range of vegetable oils—from crude and partially refined versions (utilized in biodiesel production and industrial applications like chemicals and paints) to salad oils, margarine, and shortening—as well as protein meals. ADM also manufactures a broad selection of sweeteners (such as syrup, glucose, and dextrose), corn and wheat starches, wheat flour, various alcohols (including ethyl alcohol and ethanol), citric acids, corn gluten feed and meal, and distillers' grains. Additionally, it processes specific agricultural products like peanuts, peanut-derived ingredients, and cotton cellulose pulp. Furthermore, ADM develops and supplies an extensive suite of specialized ingredients and solutions for nutrition and health. This segment features natural flavors, sophisticated flavor systems, natural colors, proteins, emulsifiers, soluble fibers, polyols, hydrocolloids, and an advanced line of natural health and nutrition products, encompassing probiotics, prebiotics, enzymes, and botanical extracts. They also provide edible beans, formulated animal feeds, animal health and nutrition products, and offer contract and private label manufacturing for pet treats and foods. Beyond its core commodity and ingredient businesses, ADM functions as a futures commission merchant, delivering commodity brokerage services. It also manages cash margins and securities pledged to commodity exchange clearinghouses and allocates cash as security for certain insurance agreements. Established in 1902, the company's corporate headquarters are located in Chicago, Illinois.
- Sector
- Consumer Defensive
- Industry
- Agricultural Farm Products
- CEO
- Juan Ricardo Luciano