UPDATE: Piper Jaffray Reiterates Overweight Rating, Lowers PT on American Vanguard
In a report published Monday, Piper Jaffray & Co. reiterated its Overweight rating on American Vanguard Corp. (NYSE: AVD), but lowered its price target from $41.00 to $38.00.
Piper Jaffray noted, “Following discussions with crop chemical manufacturers & distributors, we believe investor concerns surrounding increased competition for AVD's corn soil insecticide products are vastly overblown and recommend taking advantage of the recent weakness in AVD shares. We believe the key distinction resides in efficacy; seed treatments and liquid fertilizer ready (LFR) technologies (which is where the new competition appears to reside) is inadequate for combating high pressure below-ground insect populations. In these high pressure areas, which constitute ~30 million U.S. corn acres, soil insecticides like those sold by AVD and Syngenta provide the best protection. In this report, we provide field data gathered by university research – one study from 2012 and another from 2005, which shows that this is not a new phenomenon – that demonstrates this efficacy difference and why new seed treatment/LFR products will have little impact on AVD's growth & pricing. Price target goes to $38 from $41.”
American Vanguard Corp. closed on Friday at $28.35.
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