ADM Faces Turbulence: CFO Investigation and Profit Forecast Trim Spark 12% Share Drop

ADM's stock plunges 12% as CFO faces investigation and profit outlook trims. Learn how these challenges impact the global grains merchant's future.

Jan 22, 2024 - 09:00
Jan 22, 2024 - 09:01
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ADM Faces Turbulence: CFO Investigation and Profit Forecast Trim Spark 12% Share Drop
ADM Faces Turbulence: CFO Investigation and Profit Forecast Trim Spark 12% Share Drop

Archer-Daniels-Midland (ADM) faced a tough day with a 12% drop in premarket trading on Monday. The company took a hit as it began investigating its CFO Vikram Luthar, putting him on leave and adjusting its profit forecast for the year.

ADM, a global grains merchant, shared that Luthar is stepping aside while they investigate certain accounting practices related to its Nutrition reporting segment. Ismael Roig steps in as the interim CFO.

This investigation, prompted by a request from the U.S. Securities and Exchange Commission (SEC), is causing a delay in the release of ADM's fourth-quarter earnings.

Goldman Sachs responded by downgrading the stock from "buy" to "neutral," expressing concerns that these issues might cloud the investment case for ADM in the short to medium term. They also lowered the stock's price target from $90 to $67. BMO also adjusted its price target from $80 to $66.

ADM revised its forecast for adjusted earnings per share, now expecting $6.90 for the fiscal year ending December 2023, down from the earlier projection of "excess of $7 a share."

As a result, the stock is currently trading at $59.90. The company is navigating challenges, and investors are keeping a close eye on how these developments will impact ADM's future.

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