Monsanto (MON) to Report Q3 Earnings: What's in the Cards?

Monsanto CompanyMON is slated to report third-quarter fiscal 2017 (ended May 31, 2017) results on Jun 28, before the market opens.

Over the last one month, Monsanto's shares yielded a return of 0.59%, as against 0.73% loss incurred by the Zacks categorized Agriculture - Products industry.

Over the last four quarters, the company pulled off an impressive average positive earnings surprise of 313.91%.

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

Factors to Play

Solid demand for crop-yield enhancing products, such as Roundup Ready 2 Xtend Soybeans, is expected to bolster Monsanto's sales in the quarter to be reported. In addition, the numerous investments made by the company have been enhancing the company's Climate FieldView platform, as well as its seed and trait solutions' portfolio. This, in turn, is anticipated to boost the top-line performance in the to-be-reported quarter.

Robust revenues, greater operational efficacy and crop acreage area expansion will likely augment Monsanto's profitability in the fiscal third quarter.

However, over the last 30 days, the Zacks Consensus Estimate for the stock remained unchanged for both fiscal 2017 and 2018, reflecting neutral market sentiments.

We believe that headwinds such as declining product prices, sudden fall in market demand share or a stronger U.S. dollar might hurt results in the soon-to-be-reported quarter.

Monsanto accepted Bayer AG's BAYRY buyout offer worth $66 billion, inclusive of debt, in Sep 2016. Both the companies estimate to close the deal by the fall of calendar year 2017.

Earnings Whispers

Our proven model does not conclusively show that Monsanto will beat on earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or at least 3 (Hold) for this to happen. That is not the case here as we will see below.

You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Zacks ESP: Monsanto currently has an Earnings ESP of 0.00%. This is because both the Zacks Consensus Estimate and the Most Accurate estimate are pegged at $1.74.

Monsanto Company Price and EPS Surprise

Monsanto Company Price and EPS Surprise | Monsanto Company Quote

Zacks Rank: Monsanto carries a favorable Zacks Rank #2. However, an Earnings ESP of 0.00% makes surprise prediction difficult.

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

Stocks that Warrant a Look

Here are two stocks within the industry that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:

Arconic Inc. ARNC , with an Earnings ESP of +11.11%, and a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here .

Eastman Chemical Company EMN , with an Earnings ESP of +2.12%, and a Zacks Rank #2.

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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.

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

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