Archer Daniels Midland Co., the world’s largest grain processor, will spend $500 million buying back shares in fiscal 2011, Credit Suisse AG said.
“We continue to be encouraged by management’s constructive tone toward share repurchase,” Robert Moskow, a New York-based analyst at Credit Suisse with an “outperform” rating on the stock, said in a report today.
Moskow said his prediction for ADM’s buyback is likely to be “conservative” because he estimates the Decatur, Illinois- based company has $1.1 billion of cash available. There’s “strong potential” for an acceleration of repurchases in the next few months as commodity prices start falling, he said.
The company bought $100 million of shares in the three months through June 30 and further repurchases are among its options going forward, Chief Executive Officer Patricia A. Woertz said in a conference call with analysts Aug. 3.
Roman Blahoski, an ADM spokesman, declined to comment on buybacks since July 1, the start of the company’s fiscal year. Such information is provided on a quarterly basis, he said.
ADM dropped 8 cents, or 0.2 percent, to $32.30 at 4:25 p.m. in New York Stock Exchange composite trading. The shares have gained 3.2 percent this year.