(Reuters) – Shares of Archer-Daniels-Midland tumbled 12% in premarket trading on Monday after the company placed its CFO Vikram Luthar on administrative leave for an investigation and cut its full-year profit forecast.
The global grains merchant said Luthar was stepping aside pending an investigation regarding certain accounting practices and procedures related to its Nutrition reporting segment. It appointed Ismael Roig as the interim CFO.
The Chicago-based company said the investigation, initiated following a U.S. Securities and Exchange Commission (SEC) request, would result in a delay in its fourth-quarter earnings release.
Goldman Sachs downgraded the stock to “neutral” from “buy”, and said these issues as clouding the near- to medium-term investment case on ADM until investors can properly assess any potential impact to growth or profit.
The brokerage cut its price target on the stock to $67 from $90, while BMO cut its price target to $66 from $80.
ADM lowered its forecast for adjusted earnings per share to $6.90 for the fiscal year ended December, 2023 from an “excess of $7 a share” earlier.
The stock was last down at $59.90.
(Reporting by Medha Singh and Seher Dareen in Bengaluru; Editing by Shinjini Ganguli)
