Archer-Daniels-Midland (ADM) maintained its 2025 earnings forecast of $4 to $4.75 per share, aiming for the lower end of that range, however, this optimism might be misplaced, BofA Securities said in a note Thursday.

The analysts said the company's Q1 results raised more questions than answers. Despite management maintaining a full-year earnings forecast above $4 per share, analysts view this "optimism as misplaced," given persistently weak soybean crush margins, even with support from the 45Z tax credit and US tariffs on competing feedstocks. The analysts added they are also concerned that segment earnings benefited by a $77 million shift of incentive compensation to Corporate, "further blurring the earnings picture."

The analysts said they had hoped US soy crush margins would improve, but the company's $47 million in Crushing earnings before interest and taxes, or EBIT, showed otherwise, with margins continuing to decline quarter-over-quarter. The Carbohydrate Solutions segment also weakened, with full-year EBIT reduced to $1.08 billion from $1.12 billion. Nutrition was the only bright spot, beating expectations despite limited visibility.

"We believe that challenges to ADM's earnings remain elevated, including significant pressure in oilseed crushing and vegoil refining from regulatory uncertainty, among others, and headwinds in ag trading from tariffs on US crop exports," the analysts said.

BofA lowered its 2025 earnings per share estimate for the company to $3.90 from $4, and downgraded the stock to underperform from neutral with a $45 price target, versus $47 previously.

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