ADM (NYSE: ADM) delivered a second-quarter print on August 4, 2026 that reset the full-year story: GAAP earnings before income taxes of $1.09 billion versus $279 million a year ago, GAAP diluted EPS of $1.87 versus $0.45, and adjusted EPS of $1.84 versus $0.93, with the company simultaneously lifting its full-year 2026 adjusted EPS guidance by roughly a dollar at the midpoint (from $4.15–$4.70 to $5.15–$5.60). Total segment operating profit, the company's preferred measure of underlying business performance (i.e. consolidated earnings before income taxes with Corporate overhead, Other Business, and one-time items stripped out), jumped 75% to $1.45 billion, and trailing-four-quarter adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization, with one-time items added back) climbed to $4.20 billion from $3.88 billion. The quarter is a biofuel-policy story: the March 2026 finalization of 2026 and 2027 Renewable Volume Obligations (the EPA-mandated minimum volumes of renewable fuels that refiners and importers are required to blend into U.S. fuel supply, known as RVOs), combined with elevated global energy prices, widened crush and ethanol margins simultaneously, and ADM is the only U.S.-listed company with a top-three footprint in soybean crushing, North American ethanol (both wet-mill and dry-mill), refined oils, and a global nutrition business.
The mechanism behind the re-rating is straightforward once stated in plain English. The 2026 and 2027 RVO finalization cleared the regulatory fog that had suppressed biofuel-driven crush demand since 2024; Section 45Z of the Internal Revenue Code (a per-gallon production tax credit for low-carbon fuels, the successor to the blenders' tax credit that expired at the end of 2024) is now monetizable through 2027; and ADM's global crush footprint, anchored by the Barcarena, Brazil terminal returning to full operations, captured the demand pull. Crushing subsegment operating profit, the line item that the equity has historically been most levered to, rose from $33 million in the year-ago quarter to $363 million, an $330 million swing that on its own accounts for the entire 129% jump in the Ag Services and Oilseeds segment. The market is currently pricing ADM at $80.45 per share (August 15, 2026 close), 11.1x trailing adjusted EBITDA and roughly 15.0x the midpoint of the new full-year adjusted EPS guidance, a multiple that, in our view, bakes in only a partial credit for the 2026 step-up and none of the post-2026 biofuel-policy carry.
The single load-bearing risk is that the biofuel margin expansion is policy-driven and therefore reversible. RVO volumes for 2027 were finalized in March 2026 but can be revisited; Section 45Z final regulations remain in proposed form as of June 2026; and the refining industry's compliance cost is now flowing through to cleaner feedstock demand in a way that depends on continued enforcement. The falsifiable clock is the Q3 2026 print in late October 2026: if segment operating profit compresses sequentially by more than 15% on flat volume, the policy-tailwind thesis breaks; if it holds or expands, the equity re-rates toward the historical 12-13x EBITDA band. The market is watching crush margins and ethanol rack prices, not headline EPS, because the multiple moves on the segment line, not the bottom line.