Topeka Capital upgraded Monsanto Company (MON) on Tuesday due to an expectation of growth in the coming years.
The analysts upgraded MON from “Hold” to “Buy” with a price target of $107. The valuation is a +20% upside from Tuesday’s closing price of $89.23.
The firm commented, “When initiating coverage with a Hold rating in Sept., we acknowledged MON’s positive commercial momentum, and anticipated positive Ag fundamentals – particularly in corn – would remain a favorable tailwind for the Company. These aspects of the MON story remain intact. Our cautiousness was based primarily on perceptions regarding questions about the diminishing effectiveness of certain biotech traits, which could ultimately undermine MON’s valuation, along with perceived uncertainty regarding the impending expiration of MON’s RR patent in 2014. We now believe these potential issues could be less acute, if not benign, at least in the relatively near-term. Meanwhile, reduced “headline risk”, improving visibility regarding the 2013 growing season, and prospective increasing enthusiasm for MON’s growth prospects in Latin America, now seem likely to help MON shares outperform into, if not through, FY13-14. Accordingly, we are upgrading our rating from Hold to Buy.”
Monsanto shares were flat in premarket trading on Wednesday. The stock is up +27.34% year-to-date.
The Bottom Line
Shares of Monsanto (MON) have a 1.68% dividend yield, based on last night’s closing stock price of $89.23. The stock has technical support in the $83-$85 price area. If the shares can firm up, we see overhead resistance around the $91-$94 price levels.
Monsanto Company (MON) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.
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