Jefferies Upgrades Monsanto (MON) to Buy
Jefferies upgraded Monsanto (NYSE: MON) from Hold to Buy with a price target of $132.00 (from $95.00).
Analyst Laurence Alexander commented, "Fundamentals starting to scrabble out of a trough, a determined suitor, increasing pressure on management to be proactive, and significant optionality suggest a favorable risk/reward, particularly relative to chemical companies facing compressing feedstock spreads and choppy end-markets. We upgrade Monsanto to Buy from Hold."
The analyst cited 5 positives:
Positive #1: Favorable weather
Positive #2: A favorable risk/reward. "Monsanto's response to Bayer (BAYN VX, Hold) was far from a full-throated defense: benign enough to open the door for more productive discussions. We believe a >$130 transaction is highly likely (Table 1), with details emerging by August. Without a deal, Monsanto would likely revert to ~$100."
Positive #3: Level of interest suggests glyphosate resistance manageable
Positive #4: Flexibility
Positive #5: Activism
For an analyst ratings summary and ratings history on Monsanto click here. For more ratings news on Monsanto click here.
Shares of Monsanto closed at $109.30 yesterday.