Research Update: Archer Daniels Midland Co. Outlook To Negative On Financial Reporting Weakness; 'A' Rating Affirmed

Chicago-based global grain processor and merchandiser Archer Daniels Midland Co.'s (ADM) recently filed annual report cited a material weakness in its internal control over financial reporting but reported that this did not have a material impact on its consolidated financial statements and communicated a remediation plan to enhance its internal controls. Concurrent with its annual report filing, the company confirmed a shareholder filing of a putative class action proceeding against it and stated its expectation to repurchase up to $2.3 billion in common shares in fiscal 2024, which we project will result in debt to EBITDA approaching 2x by the end of fiscal 2024. We removed all ratings from CreditWatch where we placed them with negative implications on Jan. 23,

...- Chicago-based global grain processor and merchandiser Archer Daniels Midland Co.'s (ADM) recently filed annual report cited a material weakness in its internal control over financial reporting but reported that this did not have a material impact on its consolidated financial statements and communicated a remediation plan to enhance its internal controls. - Concurrent with its annual report filing, the company confirmed a shareholder filing of a putative class action proceeding against it and stated its expectation to repurchase up to $2.3 billion in common shares in fiscal 2024, which we project will result in debt to EBITDA approaching 2x by the end of fiscal 2024. - We removed all ratings from CreditWatch where we placed them with negative implications on Jan. 23, 2024, and affirmed all ratings, including the 'A' issuer credit rating - The outlook is negative, reflecting uncertainty over the success of its internal control remediation efforts, still-evolving legal liabilities from...

Research Update