UPDATE: Piper Jaffray Reiterates Overweight Rating, Lowers PT on Ceres

In a report published Wednesday, Piper Jaffray & Co. reiterated its Overweight rating on Ceres CERE, but lowered its price target from $15.00 to $7.00. Piper Jaffray noted, “Following slower than anticipated adoption of Ceres's sweet sorghum hybrids for the 2013 Brazilian planting season due to the drought, as stated on the 4Q and FY12 earnings call, we are shifting our model out by a year and lowering our price target. Despite the expectation of lower planted hectares in FY13, we believe the likely increase in ethanol blending in Brazil next year will increase demand for sweet sorghum and ramp product adoption. Based on our model revisions, our PT drops from $15 to $7 as we apply a new multiple of 15x CY15 discounted at 30% for 1 year (previously 12x CY15 discounted at 30% for 2 years), where the 15x multiple is in line with the seed & crop chemical peer group and the slower adoption pushes the model out a year approaching FY13.” Ceres closed on Tuesday at $4.08.