Monsanto (NYSE:MON) Chief Executive Officer Hugh Grant has been counting on the performance of their Smartstax corn to battle their major competitor DuPont (NYSE:DD), who has been gaining market share on them.
As data come in though, the news hasn't been that good, as the corn seed, which includes eight genetic traits, is unlikely to outperform less expensive seed with fewer traits, according to Goldman Sachs (NYSE:GS).
Goldman Sachs analyst Robert Koort said, “We no longer expect SmartStax to outyield its robust triple stacks. Yield parity is the new target.”
Yields from Iowa confirm Koort's statement, as the are behind the triple stacks yield by 3 percent to 5 percent. Koort added the gap between the two seeds could shrink as northern areas with larger insect infestation return data.
While Goldman maintains their "Neutral" rating on the stock, along with earnings estimate of $2.87, they did lower the price target on Monsanto from $71 to $64.
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