Archer-Daniels-Midland trades at historically highest levels but is there any risk?

The Archer-Daniels-Midland Company (NYSE:ADM) is trading at a price of $95.93. This is among the highest valuations in the company’s history. The agricultural stock is a key beneficiary of the ongoing support for the sector. The stock’s appreciation is also in line with rising commodity prices. What can be expected, therefore, is that a pullback in commodity prices would drag down the stock price.

Zacks Research rates the Archer-Daniels-Midland Company perfectly on three key parameters of value, growth, and momentum. Subsequently, the research house recommends a buy for the stock. However, there are two price indicators that investors should carefully consider. The PEG ratio is at 10.42, whereas an attractive PEG ratio is below 1. The forward PE is 18.45, while many value stocks will have single-digit PE ratios.

Considering the fundamental indicators above, Archer-Daniels-Midland is overpriced. The stock is driven by excitement and thrill. As commodity prices reach full valuation, the company will attract a price pullback. Signs of this have begun. In fact, it is unlikely that the stock will cross above $100. The greatest risk for investors now is being in a bull trap.

ADM is trading lower this week compared to last week

Source – TradingView

Archer-Daniels-Midland is trading at an RSI of 80. The stock is certainly in the overbought region and set for a price correction. Over the last two weeks, the price range narrowed down, and the lower shadow of the candlestick grew longer. This week’s prices are also a dollar lower than last week’s. Adding these findings to the RSI that has pointed downwards, it is clear that a price retreat is nigh.


Archer-Daniels-Midland is a strongly recommended sell. The price is unlikely to break through the $100 emotional barrier. The greatest risk now is a bull trap.

The post Archer-Daniels-Midland trades at historically highest levels but is there any risk? appeared first on Invezz.

Disclaimer:, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2022 All Rights Reserved.

To Top