2Q MTM Creates Dislocation; Underlying Improving - NDR Feedback

研报英文原文证据摘录

2Q MTM Creates Dislocation; Underlying Improving - NDR Feedback

zed $275mn potentially repeating); Ag Services drives sequential lift, RPO $800$700

$500

$400benefits from biofuel mandates, peak 2021/2022 unlikely but lows stepping higher. Carbs: VCP 6 $600

$300

e $200AS&O Cons

operating profit down sequentially as 1Q hedging gains don't repeat, S&S up on seasonal strength $100$0 3Q26AS&O JEFe 4Q26 AS&O Cons Carb Sol JEFe Carb Sol Cons Nutrition JEFe Nutrition Cons

1Q26 2Q26 3Q26 4Q26and wet-mill ethanol transfer pricing; sweetener revenue declined but stronger margins. Nutrition: .

1Q OP $135mn (+42% YoY) and 2Q estimated at $142mn validates turnaround; Decatur East flips

from $20-25mn/qtr drag to contributor, Flavors compounding into seasonal peak, Alltech JV to

equity method, H&W fastest-growing with $3bn TAM and LT potential.

NDR Feedback: Mgmt excited for LT opportunity in Natural Colors and Precision Fermentation;

45Z constructive, M&A discipline reinforced. Mgmt is most energized on Natural Colors and PF

as overlapping LT growth platforms, not NT contributors. Natural Color conversion in US framed as

$900mn revenue TAM with $80-100mn OP opportunity over time as customers reformulate from

artificial to natural. ASO: refiners opening, Brazil crush capacity a watch-item. Carbs: S&S decline

offset by BioSolutions; 45Z "ok" with new GREET model adopting. M&A: prefer tuck-ins unless

asymmetric upside.

We reiterate a Hold and lower PT on M2M to $75. Mid-cycle earnings power the debate; SOTP

supports range-bound setup. Bull: Nutrition inflects ($417mn 2025 OP toward $550mn+), ethanol

normalizes, $700mn cost-out flows. Bear: M2M timing into 2027, Wilmar palm oil step-down.

Rerating needs cleaner Crush print and sustained Nutrition margin expansion. Watch 2Q print and