Goldman Sachs Cuts Estimates and Price Target On Monsanto (MON)
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Today, Goldman Sachs lowered their estimates and price target on Monsanto Co. (NYSE: MON), citing lower glyphosate profits and lower seed price increases for the upcoming planting season. Goldman noted that, with yesterday's earnings, MON implied potential erosion to $1 billion in gross profits for Round-up in 2012, versus prior guidance of $1.9 billion.
Interestingly though, Goldman said MON's EPS reduction is "positive." The firm argues that while the abrupt reduction in EPS for a former "beat and raise" machine is an unwelcome development, it removes the future risk of additional downside adjustments.
Goldman cut 2010 EPS estimates by $0.50 to $4.30 and cut FY11 EPS estimates by $0.45 to $4.65. The firm cut its price target on MON by $7 to $80 per share. The firm maintains a Neutral rating on the stock.
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