Monsanto (MON) Falls On Concerns Over Lower-Yielding SmartStax
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Price: $10.07 --0%
Rating Summary:
11 Buy, 13 Hold, 3 Sell
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Today's Overall Ratings:
Up: 13 | Down: 22 | New: 15
Rating Summary:
11 Buy, 13 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 22 | New: 15
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Shares of Monsanto (NYSE: MON) are under heavy pressure today following concerns over weaker-than-expected performance of its new SmartStax corn seeds in Iowa, as highlighted by analysts at Jefferies & Company.
Analyst Laurence Alexander noted that, based on initial data sample available, SmartStax generated an average yield in Iowa of 199.7 bu/acre, lagging VT Triple Pro (209.8 bu/acre, 105 datapoints), VT Triples (204.7 bu/acre, 240 datapoints) and even VT Double Pro (206.9 bu/acre, 7 datapoints).
"Overall, underperformance by 3%-5%, if duplicated across the rest of the central corn belt and across the entire harvest, would be a disappointing result," Alexander said.
"Though less than 10% of planted SmartStax acres this year have been harvested to date, we believe the company is prepared to start acting on its satisfaction promise," he said. Credits could become a headwind to 2011, Alexander suggests.
Shares of Monsanto are down 9 percent to $48.24 in mid-day trading.
Analyst Laurence Alexander noted that, based on initial data sample available, SmartStax generated an average yield in Iowa of 199.7 bu/acre, lagging VT Triple Pro (209.8 bu/acre, 105 datapoints), VT Triples (204.7 bu/acre, 240 datapoints) and even VT Double Pro (206.9 bu/acre, 7 datapoints).
"Overall, underperformance by 3%-5%, if duplicated across the rest of the central corn belt and across the entire harvest, would be a disappointing result," Alexander said.
"Though less than 10% of planted SmartStax acres this year have been harvested to date, we believe the company is prepared to start acting on its satisfaction promise," he said. Credits could become a headwind to 2011, Alexander suggests.
Shares of Monsanto are down 9 percent to $48.24 in mid-day trading.
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