Topeka Capital Markets Reiterates Buy on Monsanto on Buying Opportunity Created by Low Corn Prices
In a report published Wednesday, Topeka Capital Markets analyst Chris Kapsch reiterated a Buy rating and $120.50 price target on Monsanto Company (NYSE: MON).
In the report, Topeka Capital Markets noted, “Since reporting an in-line F3Q13, MON shares are off 3%, and the stock has slumped 10% from its mid-May high. The culprit is more adverse sentiment – a function of weaker corn prices – than Monsanto-specific execution or earnings visibility. To the contrary, growth prospects have improved with China's approval of Intacta beans, which sets up for a step change in profitability in MON's Latin American business. Still, lower corn prices, should they persist, will cloud MON's outlook for FY14. While there remains consternation about prospects for a bumper domestic crop, our proprietary Ag contacts expect both acreage AND yield forecasts will come down, portending a rebound in corn prices. Further discussion in our report. Higher, or even flat corn prices, should be conducive for MON to deliver another solid year of EPS growth in FY14. Thus, we would view the recent/current weakness a buying opportunity.”
Monsanto Company closed on Tuesday at $98.42.
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