Archer-Daniels-Midland (ADM) faced a tough day with a 12% drop in pre-market trading on Monday. The company took a hit when it began investigating its chief financial officer, Vikram Luthar, placing him on leave and adjusting its profit forecast for the year.
ADM, a global cereal trader, shared that Luthar will be stepping aside while they investigate certain accounting practices related to their Nutrition reporting segment. Ismael Roig assumes the position of interim financial director.
This investigation, prompted by a request from the United States Securities and Exchange Commission (SEC), is causing a delay in the publication of ADM’s fourth quarter results.
Goldman Sachs responded by downgrading the stock from “buy” to “neutral,” expressing concern that these issues could cloud the investment case for ADM in the short and medium term. They also lowered their price target on the stock from $90 to $67. BMO also adjusted its price target from $80 to $66.
ADM revised its adjusted earnings per share forecast and now expects $6.90 for the fiscal year ending December 2023, down from the previous projection of “in excess of $7 per share.”
As a result, the stock is currently trading at $59.90. The company is facing challenges and investors are watching how these developments will affect ADM’s future.
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