) is set to report fiscal first-quarter 2014 results on Jan 8
before the market opens. Last quarter, the company posted a 9.30%
negative surprise. Let us see how things are shaping up for this
Factors to Consider This Quarter
Monsanto has been growing organically as well as inorganically
over the past few quarters. With the acquisition of Climate
Corporation in Oct 2013, we expect the company to achieve greater
success in the coming quarters. However, massive time and
expenses toward innovative herbicide products and biotechnology
traits make them high priced, thereby exposing the company to
major price competition from local generic companies.
Additionally, the company's Seeds and Genomics segment
experienced a year-over-year revenue and gross profit decline in
the fourth quarter of fiscal 2013. The presence of many market
players in the segment is another concern.
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
and a Zacks Rank of #1, 2 or 3 for this to happen. That is not
the case here, as you will see below.
Negative Zacks ESP:
This is because the Most Accurate Estimate stands at 62 cents
while the Zacks Consensus Estimate is higher at 63 cents. That is
a difference of -1.59%.
Zacks Rank #3 (Hold):
Monsanto carries a Zacks Rank #3 (Hold). However, the Zacks Rank
#3 (Hold) when combined with a -1.59% Earnings ESP makes surprise
prediction difficult. We caution against stocks with Zacks Ranks
#4 and 5 (Sell-rated stocks) going into the earnings
Other Stocks to Consider
Here are some other companies in the basic materials sector
you may want to consider, as our model shows they have the right
combination of elements to post an earnings beat this
The Andersons, Inc.
), with Earnings ESP of +1.33% and a Zacks Rank #1 (Strong
),with Earnings ESP of +0.93% and a Zacks Rank #3 (Hold)
Exxon Mobil Corporation
), with Earnings ESP of +1.03% and a Zacks Rank #3 (Hold)
ANDERSONS INC (ANDE): Free Stock Analysis
BUNGE LTD (BG): Free Stock Analysis Report
MONSANTO CO-NEW (MON): Free Stock Analysis
EXXON MOBIL CRP (XOM): Free Stock Analysis
To read this article on Zacks.com click here.