Archer Daniels rides ethanol boom to boost profit

Archer Daniels Midland is seeing strong momentum in its Carbohydrate Solutions segment, driven by improving conditions in the ethanol market. In the second quarter of 2026, the unit delivered a 22% year-over-year increase in operating profit, while Starches and Sweeteners operating profit rose 7%.

Management stated that ethanol margin strength and policy incentives drove the segment gains. These tailwinds more than offset persistent pressure on liquid sweetener volumes and margins, especially in North America. To sustain this momentum, the company is pursuing ethanol capacity expansions and debottlenecking projects across its existing processing facilities.

Over the past six months, Archer Daniels shares gained 24.2%, outpacing the industry average growth of 8.2%. The stock trades at a forward price-to-earnings ratio of 15.99X, compared with the industry average of 15.19X. On 14 September 2026, Zacks Investment Research carried a Zacks Rank #1 (Strong Buy) on the company, noting consensus estimates that project annual earnings per share growth of 52.2% for 2026 and 3.5% for 2027.