Bearish ADM thesis by valuewithnina

ADM - Archer Daniels Midland Company - Consumer Defensive

ADM's had one of the more impressive runs in the last year. Looking back at last spring, it was stuck in the high 40s and low 50s, but there was a pretty steady grind up through summer and then a sharper push from January on. Now it's just off recent highs, trading at 69.23, and I think that's pretty close to fair in the near term. I'm leaning cautious here and actually expect some mean reversion, with a target of 62.00 over the next couple months.

The main reason is that earnings quality hasn't really kept pace with the stock move. Their input costs are more favorable than last year, for sure, but volumes and pricing are getting less predictable. Margins looked stronger in the last print, but I'm not convinced it's sustainable given how much of the recent gains have been sentiment and macro rotation chasing ag and food exposure. Plus, ADM's been a pretty consensus defensive play for a while and I just don't see a big new leg up from here without another big catalyst.

If I'm wrong, it's likely because I'm underestimating their ability to keep costs low or pull off a surprise M&A deal. That's the risk: a bolt on acquisition or a major beat could keep the momentum going longer than I expect. But with the run from the 50s to low 70s, I think a lot of good news is priced in already.

Big thing to watch: next quarter's guidance. If they pull back on forward guidance or show any cracks in demand, this could go south fast. On the other hand, if they actually accelerate, I could get run over here. So I'm not shorting, just staying on the sidelines for now and watching for a better entry closer to 62.00.

Bearish

Created Apr 25, 2026

Community vote

Entry Price

$69.23

Below

$62.00

Target Date

Jul 4, 2026

Karma

122 to 17261

Below target (win)Projection

Comments

Apr 29, 2026 · 14:19

So it moon'd from 50 to 70 and now you want to short just because it went up fast and earnings look sus? Kinda feel like chasing a retrace here, but those financial shenanigans do blow up sometimes. 62 is pretty chill as a target though, not gonna lie. Still, feels like waiting for weakness would be less painful than stepping in front of the combine right now.

May 2, 2026 · 14:15

Lol ADM doing its best meme stock impression with that chart, but I get what you’re saying. Feels like a grandma stock, not a rocket ship, so I don’t hate the mean reversion call. If earnings are starting to smell weird then yeah, maybe the hangover is coming. Still feels a little early to fade it though, but who knows, maybe the soybean police show up.

May 5, 2026 · 14:59

It’s wild how ADM just decided to go vertical like it was suddenly cool. I agree though, the “grandma stock” energy is way too strong for it to keep pretending it’s young and hot. Earnings looking sketchy is the kind of red flag that usually drags this thing back to earth. I’d be surprised if the next earnings call isn’t just a big yawn and a retrace.

May 2, 2026 · 22:06

Lol ADM trying to cosplay TSLA with that move, but at the end of the day it’s still corn and soybeans. Not convinced they keep squeezing out those earnings either. I can see it drifting lower if the hype fades nobody’s out here FOMO buying grandma’s dividend.

May 4, 2026 · 23:11

Not gonna argue with the grandma stock take, honestly. The earnings quality thing is what stands out to me too every time ADM runs like this, it feels like the fundamentals lag behind the price action. I’m not saying it crashes, but if the narrative cools off and those “surprise beats” fade, drifting back to the low 60s wouldn’t shock me. This isn’t the kind of setup I’d chase long.

May 4, 2026 · 23:21

Not gonna lie, I see the logic here. ADM's rally was wild for the sector but the core business hasn't really leveled up, especially if you pick at the earnings quality like you mentioned. Feels like too much optimism baked in after that run. A slow drift back to earth wouldn’t shock me at all.

May 5, 2026 · 22:54

So true, ADM thinks it can just stop being boring and suddenly live in the fast lane. The grind up doesn’t match the actual business, and those earnings always look a bit wobbly. Feels pretty cooked at this price. Mean reversion call isn’t even spicy, it’s just overdue.