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UPDATE: Topeka Capital Raises PT on Monsanto Company on Cross-Licensing Deal

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In a report published Wednesday, Topeka Capital Markets analyst Chris Kapsch reiterated a Buy rating on Monsanto Company (NYSE: MON), and raised the price target from $113.50 to $120.50.

In the report, Kapsch noted, “The cross-licensing deal announced between DuPont and Monsanto is a meaningful positive for MON, increasing the likelihood that domestic soy farmers inevitably and ubiquitously adopt MON's next gen Roundup Ready to Yield (RR2Y) technology for soybeans. The deal also adds incremental earnings (via royalties, starting FY14) that may not have come through had DuPont endeavored to compete exclusively using first generation Roundup Ready (RR) trait technology, which comes off patent next year. Further, with DuPont embracing RR2Y, there is diminished risk the RR soy market comes under generic-based pricing pressure. We are increasing our FY14 EPS estimate to reflect the incremental royalties and our target price to reflect diminished risks that may have otherwise dragged on MON's multiple. We continue to use any volatility into/through March 28th (when the USDA crop planting intentions report is released) as an opportunity to buy MON.”

Monsanto Company closed on Tuesday at $103.79.

Latest Ratings for MON

DateFirmActionFromTo
Mar 2015UBSMaintainsBuy
Mar 2015BarclaysInitiates Coverage onEqual-weight
Jan 2015CitigroupMaintainsBuy

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Posted-In: Topeka Capital MarketsAnalyst Color Price Target Analyst Ratings

 

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