Monsanto (MON) Decline Overdone, Says Goldman Sachs

August 13, 2013 12:45 PM EDT Send to a Friend
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Price: $113.04 -0.39%

Rating Summary:
    22 Buy, 5 Hold, 1 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 15 | Down: 28 | New: 20
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Goldman Sachs maintained a Conviction Buy on Monsanto (NYSE: MON) with a price target of $122.00. Share declined recently as a result of falling corn prices. In the view of analyst Robert Koort, the decline is overdone.

"While fading corn prices have eroded ag investing sentiment, we see MON's recent share price weakness as overdone given the historical precedent for strong earnings growth even following declining corn prices," said Koort.

"Fades in corn prices are common, but so too are subsequent strong MON corn earnings results. Following a 40% drop in corn prices in the summer of 2004, MON grew corn gross profits 29% in 2005. Similarly, after a 63% plunge in corn prices in 2008 to below $3/bu, MON's corn gross profit rose 20% in 2009. In fact, the only decline (-5%) in corn profits in the past decade for MON came in 2010, but we attribute much of this to product launch issues with SmartStax more than corn price declines," he added.

For an analyst ratings summary and ratings history on Monsanto (NYSE: MON) click here. For more ratings news on Monsanto click here.

Shares of Monsanto closed at $95.68 yesterday.


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