Agricultural products giant Monsanto Company ( MON
The firm maintained its "Buy" rating on the stock, but lowered its price target to $60 from $82. Monsanto shares had closed at $50.27 on Thursday.
Deutsche analyst commented, "The lone positive of this repositioning and earnings reduction is that at just 4% of '12E gross profit (vs 32% in '08), Roundup is no longer material. With downside EPS risks from Roundup minimized (given its modest level of profitability), we remain confident that the world's premier seed business can drive mid-teens EPS growth. Reflecting the lowered outlook for Roundup, we have reduced our 2010E EPS by $0.65 to $2.50, down 43%, 2011E EPS by $0.85 to $2.90, up 16%, and 2012E EPS by $0.95 to $3.40, up 17%."
Monsanto shares fell 56 cents, or -1.1%, in premarket trading Friday.
The Bottom Line
We removed shares of MON from our "recommended" list back on May 13, 2009, when the stock was trading at $90.08. The company has a 2.11% dividend yield, based on last night's closing stock price of $50.27. The stock has technical support in the $47-$49 price area. If the shares can firm up, we see overhead resistance around the $56-$59 price levels. We would remain on the sidelines for now.
Monsanto Company ( MON ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.2 out of 5 stars.
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