CLSA Says Buy The Dip In Monsanto When The Bayer Deal Falls Apart

The CLSA analyst who covers Monsanto Company MON, Mark Connelly, made a rather bold prediction Thursday. The analyst commented on what investors should do with the stock, and argued: "Hold it, or trade around the likely collapse of the Bayer deal."

Connelly placed the likelihood of a Bayer, Monsanto deal at "less than 10% - lower even, than a Syngenta-Chinese government deal."

"Bayer’s offer to acquire Monsanto comes at an ideal time to distract investor attention away from pretty miserable market conditions, and Monsanto management is making full use of the distraction," according to Connelly.

Upon the calling off of the Bayer deal -- something which he noted as likely to occur "shortly" -- Connelly suggested investors buy the dip. With corn prices nearer to $4 and the outlook for seed pricing next season "much better," Connelly said he expects Monsanto "to have more promising things to talk about inside the company."

CLSA maintained a Buy rating on shares of Monsanto.