Monsanto Downgraded; How Are Analysts Viewing Other Options In The Industry?

Monsanto Company MON is trading down about 1 percent on Christmas Eve, after analysts at Miller Tabak downgraded the stock from Buy to Neutral.

Earlier this month, the stock received another downgrade from Monness Crespi Hardt, from a Buy to Neutral rating, and cut its price target to $127, from a previous $140. The stock currently trades around $121.50.

So, how are analysts esteeming other companies in the agricultural inputs industry?

E.I. du Pont de Nemours and Company DD

E.I. du Pont is the only direct competitor with a market cap ($67.9 billion) larger that of Monsanto ($58.7 billion).

Analysts can’t seem to agree on the ratings; on October 29, when the stock traded around $66.80, Barclays issued an equal weight recommendation, with a $72 price target, while Citigroup and Deutsche Bank reiterated their Buy ratings, accompanied by $78 price targets. The latter implied a 16 percent upside potential at the time, and still leaves room for a 4 percent increase from the current stock price.

Earlier this quarter, on October 8, RBC Capital initiated coverage on the stock with a Sector Perform rating and a $71 price target; the stock traded around $61 at the moment.

Syngenta AG SYT

Unlike Monsanto and du Pont, Syngenta ($30.5 billion market cap) has had a tough year; its stock lost more than 18 percent year-to-date. Recent ratings are scarce: only Jefferies issued a recommendation in the fourth quarter. The research firm reiterated its Hold rating on October 7, accompanied by a $70 price target, when the stock traded around $61-$62 per share.

Although the stock has returned about 7 percent since that moment, there is still another 7 percent left to go -- up, of course.

Potash Corporation of Saskatchewan Inc. POT

Finally, there’s Potash Corporation, with a market cap of $29.75 billion. The stock is up about 8.8 percent year-to-date, and analysts see it going further.

On December 19, UBS upgraded the stock from a Neutral to a Buy; earlier in the month, JP Morgan promoted it from Neutral to Overweight, raising its price target from $34 to $40 on the back of ameliorating fundamentals and projections of an increased free cash flow yield for 2015 and 2016.

In November, the stock received another upgrade, from Raymond James, from Market Perform to Outperform, accompanied by a $40 price target.

On the contrary, Citigroup reiterated its Neutral rating, with a $37 price target.

Even the lowest of price targets implies some upside potential from the current price of $35.83 per share, while the median ($40) indicates that the stock could return more than 11 percent.