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Monsanto Company Message Board

  • diligentconqueror_m diligentconqueror_m Jan 29, 2013 2:36 PM Flag

    Credit Suisse turns eye to agricultural science and Monsanto

    Credit Suisse turns eye to agricultural science and Monsanto

    E.B. Solomont
    Reporter-
    St. Louis Business Journal

    You know opportunity has come knocking when a Wall Street firm picks up coverage of a company (or sector, for that matter). And that’s just what happened earlier this month, when Credit Suisse initiated coverage of the North American agricultural sciences sector, including Monsanto.
    The St. Louis-based seed company was among the firm’s “outperform-rated” stocks, according to analyst Christopher Parkinson, who gave Monsanto a price target of $120. (The stock closed at $102.85 a share on Jan. 28.)
    “In our view, the market has not fully appreciated the company’s near-term opportunity to enhance profitability on the back of further adaptation of stacked traits in the United States and increase its biotech soy and corn acreage in South America,” Parkinson wrote Jan. 16. Also, he wrote, “Monsanto’s best-in-class seed genetics platform should also act as an in-road to several emerging commercialized agricultural markets such as Eastern Europe and selected countries in Southeast Asia.”
    Overall, Credit Suisse’s coverage taps into a growing sector.
    “We estimate biotech crops comprise only ~10% of the global crop area, representing a significant long-term opportunity,” Parkinson wrote Jan. 16. “Near-term growth will remain driven by the Americas, with greater penetration of multi-stacked traits as the core value driver. Longer term, new trait technologies in Yield & Stress and growth efficiencies will likely create additional market value, in addition to new countries implementing more favorable regulatory standards due to high crop prices and the desire to narrow growing yield gaps.”
    Led by Chairman and CEO Hugh Grant, Monsanto has annual revenue of $13.5 billion. Net income in the first quarter of fiscal 2013 jumped 160 percent to $349 million as sales rose 20.5 percent to $2.9 billion, compared with the prior-year quarter.

    Sentiment: Strong Buy

 
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