UPDATE: Goldman Sachs Downgrades Monsanto Following Dilutive Acquisition

In a report published Thursday, Goldman Sachs analyst Robert Koort downgraded the rating on Monsanto Company MON from Conviction List-Buy to Buy, and lowered the price target from $124.00 to $118.00. In the report, Goldman Sachs noted, “We are removing MON from the Americas Conviction Buy List; however, we reiterate our Buy rating. Since being added to the list on 9/19/12, MON has risen 14.1% vs. 15.9% for the S&P 500. On October 2, MON reported weaker than expected 4Q13 EPS, provided initial 2014 EPS guidance that was below consensus and announced a $930mn acquisition that it believes will be $0.14 dilutive to 2014 EPS. We lower our FY14 EPS from $5.54 to $5.46 to account for the lower FY13 base, but do not yet include the acquisition. We also lower our 12-month target price by $6 to $118, or 21.5x our lower FY14 EPS. Our multiple is 0.5x lower to reflect the less certain acquisition strategy.” Monsanto Company closed on Wednesday at $104.04.