Canaccord Genuity Morning Coffee on Monsanto (MON): A Growth Opportunity?
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Price: $10.07 --0%
Rating Summary:
11 Buy, 13 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
11 Buy, 13 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Canaccord Genuity Morning Coffee on Monsanto (NYSE: MON): A growth opportunity?
Shares of Monsanto traded lower after the company reported Q2 earnings that beat expectations, but left its guidance unchanged, disappointing investors. The company reported recurring Q2 earnings of $1.87 per share, ahead of the consensus estimate of $1.84 and Canaccord Genuity Agriculture Analyst Keith Carpenter’s estimate of $1.81. Carpenter notes that while the results beat his estimate, it was due to a better-than-expected tax rate, which added $0.05 and a slightly better- than-reported interest expense, which added $0.01. Looking ahead, the company kept its full-year earnings guidance of $2.72- 2.82, in line with Carpenter’s estimate of $2.78, but short of the consensus of $2.85. He is revising his F11 earnings estimate upwards by $0.01 to $2.79 per share and keeping his F12 estimate at $3.23. Carpenter remains neutral on the stock as believes the company will have difficulty in increasing pricing materially for its products into 2012 as the farmer, in his opinion, has the upper hand this year resulting from past pricing practices and an unlucky SmartStax result last year. Management stated that they would be looking for only marginal price increases into 2012 given their expectation that the current high grain prices will decrease somewhat and therefore would like to build upon a base price that does not get forced lower when grain prices retreat. While Carpenter believes the company has a strong longer term outlook as a result of its research pipeline, he believes the shares lack a near-term catalyst to propel them higher in 2011, justifying his neutral stance at this time.
Shares of Monsanto traded lower after the company reported Q2 earnings that beat expectations, but left its guidance unchanged, disappointing investors. The company reported recurring Q2 earnings of $1.87 per share, ahead of the consensus estimate of $1.84 and Canaccord Genuity Agriculture Analyst Keith Carpenter’s estimate of $1.81. Carpenter notes that while the results beat his estimate, it was due to a better-than-expected tax rate, which added $0.05 and a slightly better- than-reported interest expense, which added $0.01. Looking ahead, the company kept its full-year earnings guidance of $2.72- 2.82, in line with Carpenter’s estimate of $2.78, but short of the consensus of $2.85. He is revising his F11 earnings estimate upwards by $0.01 to $2.79 per share and keeping his F12 estimate at $3.23. Carpenter remains neutral on the stock as believes the company will have difficulty in increasing pricing materially for its products into 2012 as the farmer, in his opinion, has the upper hand this year resulting from past pricing practices and an unlucky SmartStax result last year. Management stated that they would be looking for only marginal price increases into 2012 given their expectation that the current high grain prices will decrease somewhat and therefore would like to build upon a base price that does not get forced lower when grain prices retreat. While Carpenter believes the company has a strong longer term outlook as a result of its research pipeline, he believes the shares lack a near-term catalyst to propel them higher in 2011, justifying his neutral stance at this time.
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