UPDATE: Piper Jaffray Reiterates Overweight Rating, Lowers PT on Ceres Following Initial Sweet Sorghum Hybrids Assessment

In a report published Friday, Piper Jaffray analyst Michael E. Cox reiterated an Overweight rating on Ceres

, but lowered the price target from $7.00 to $5.00. In the report, Cox noted, “Although the second commercial season for Ceres' sweet sorghum hybrids is not yet complete, we are encouraged by the initial assessment of the crop and continue to expect a sharp increase in planted hectarage next season. This season it appears that CERE hybrids have out-yielded competitors and that Ceres has at the least maintained its dominant market share. We are modeling for a 5x increase in planted acreage next season, but we are adjusting our estimates lower to incorporate a slower ramp in planted hectares than what we previously expected. We also believe that the current rate that CERE is going through cash will weigh on valuations and we are lowering our multiple to 2.0 EV/CY15 sales (2.5x previously) and our price target moves from $7 to $5.” Ceres closed on Thursday at $3.21.