Will Monsanto (MON) Beat Earnings this Season? - Analyst Blog


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Monsanto Company  ( MON ) is set to report its fiscal third-quarter 2014 (ended May 31, 2014) results on Jun 25, before the opening bell. It had delivered a positive earnings surprise of 1.94% in the preceding quarter.

Let's see how things are shaping up for this announcement.

What is Driving the Better-than-Expected Earnings?

Monsanto is witnessing a rise in revenues based on its organic as well as inorganic growth. Given the increased sales of corn and soybeans, the company is expected to prosper. It has also been launching products so as to gain a significant market share. In fiscal 2013, the company unveiled the Intacta technology, for facilitating soybean growth over the coming years.

Further, Monsanto has been making successful attempts to reduce costs over the past quarters. However, overseas operations of the company expose it to foreign currency fluctuations, thereby impacting its earnings.

Why a Likely Positive Surprise?

Our proven model conclusively shows that Monsanto will beat earnings this quarter because it has the right combination of two key components.

Positive Zacks ESP:  The company's Earnings ESP , which represents the difference between the Most Accurate estimate of $1.60 and the Zacks Consensus Estimate of $1.55, stands at +3.23%. This is very meaningful and a leading indicator of a likely positive earnings surprise for shares.

Zacks Rank: Monsanto carries a Zacks Rank #3 (Hold). Note that stocks with Zacks Ranks #1, 2 or 3 have a significantly higher chance of beating earnings.

This combination of Monsanto's Zacks Rank and Earnings ESP makes us confident about a positive earnings beat.

We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Other Stocks to Consider

Monsanto is not the only firm looking up this earnings season. Other stocks in the sector having the right combination of the two key ingredients are:

Limoneira Company ( LMNR ), with an Earnings ESP of +5.56% and a Zacks Rank #2 (Buy).

The Andersons, Inc. ( ANDE ), with an Earnings ESP of +8.70% and a Zacks Rank #3.

Exxon Mobil Corporation ( XOM ), with Earnings ESP of +0.53% and a Zacks Rank #3.

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MONSANTO CO-NEW (MON): Free Stock Analysis Report

ANDERSONS INC (ANDE): Free Stock Analysis Report

EXXON MOBIL CRP (XOM): Free Stock Analysis Report

LIMONEIRA CO (LMNR): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Earnings , Stocks
Referenced Stocks: MON , ANDE , XOM , LMNR

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