Monsanto Jumps On Price Target Boost (MON, BHP, POT, IPI, CMP, TNH, MOS)
Monsanto Company (MON), the maker of genetic seeds and other agriculture products, is trading higher by 2% today after Piper Jaffray raised its price target on the stock to $75 from $74 while reiterating an “overweight” rating on the shares. Based on where Monsanto closed on Tuesday, the Piper Jaffray price target implies 12% for the stock.
The brokerage firm said Monsanto could see a benefit of 15-30 cents in earnings per share due to a recent 20% in glyphosates in China. In another analyst note, Argus said it expects Monsanto to report first-quarter earnings of two cents a share compared with the consensus estimate of one cent, but cautioned that weakness in Monsanto’s Rounup business market share losses in seeds and genomics will weigh on the company.
Overall, the Agricultural Chemical and Fertilizer Stocks Index is enjoying a solid day, up 2.2% with all but one Index member higher.
The Index may be getting a lift on news China National Chemical will acquire an Israeli generic chemical maker for $2.4 billion, a deal that was announced yesterday. China had previously opposed large-scale mergers and acquisitions activity in the sector, voicing its displeasure over BHP Billiton’s (BHP) $38.6 billion hostile takeover offer for Potash Corp of Saskatchew (POT) earlier this year and even tried to prepare a bid for the Canadian company so that it would not fall into BHP Billiton’s hands.
A report by 24/7 Wall Street notes that Intrepid Potash (IPI) and Compass Minerals Intl (CMP), two Index members, and Terra Nitrogen Company (TNH) could make for compelling targets for Chinese firms looking to bolster their fertilizer exposure. Compasss Minerals is up 1% today while Intrepid Potash is up 5%. Mosaic Company (MOS) has also been rumored as another potential target in the sector.
Investors can track the Agricultural Chemical and Fertilizer Stocks Index for performance trends and a suite of other metrics at tickerspy.com.
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