Can Monsanto (MON) Keep the Earnings Streak Alive? - Analyst Blog


Monsanto Company ( MON ) is set to report fiscal fourth-quarter 2013 results on Oct 2 before the market opens. Last quarter, the company posted a 3.75% positive surprise. Let's see how things are shaping up for this announcement.

Factors to Consider This Quarter

Monsanto has been delivering strong results over the past few quarters. The company's increased production, as a result of research and development efforts are proving beneficial. The improved product line based on evolving bio-science technology continues to provide the company a competitive edge over its peers. Global corn business is also on the rise, led by increases in regions like Latin America and Eastern Europe.

Last quarter, management was optimistic of reaching earnings per share range of $4.50-$4.55 in fiscal 2013, reflecting roughly 20% year-over-year growth. Monsanto also maintained its free cash flow expectations within the range of $1.8 billion-$2.0 billion.

Earnings Whispers?

Our proven model does not conclusively show that Monsanto is likely to beat earnings this quarter. That is because a stock needs to have both a positive Zacks Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here, as you will see below.

Zacks ESP: The Zacks ESP is 0.0%.

Zacks Rank #3 (Hold): Monsanto carries a Zacks Rank #3 (Hold). However, the Zacks Rank #3 (Hold) when combined with a 0.0% ESP makes surprise prediction difficult. We caution against stocks with Zacks Ranks #4 and 5 (Sell-rated stocks) going into the earnings announcement.

Other Stocks to Consider

Here are some other companies you may want to consider, as our model shows they have the right combination of elements to post an earnings beat this quarter:

The Scotts Miracle-Gro Company ( SMG ), with Earnings ESP of +5.26% and a Zacks Rank #2 (Buy).

Huntsman Corporation ( HUN ), with Earnings ESP of +1.85% and a Zacks Rank #3 (Hold).

Praxair Inc. ( PX ), with Earnings ESP of +0.66% and a Zacks Rank #3 (Hold).

HUNTSMAN CORP (HUN): Free Stock Analysis Report

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

PRAXAIR INC (PX): Free Stock Analysis Report

SCOTTS MIRCL-GR (SMG): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

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

This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: HUN , MON , PX , SMG

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