Market sentiment for Monsanto (NYSE:MON) has been varied, and for the last quarter it has been difficult finding anything positive for the company. Even so, Citigroup (NYSE:C) maintains their "Buy" rating on the seed company, citing a long-term positive outlook.
Citi said, “Pricing adjustments and a focus on working with farmers will support adoption of the refuge-reduction corn platform next year. We maintain our Buy on the stock, as it is attractive on a long-term basis after the massive decline this year. However, we acknowledge that the path toward the realization of our thesis has lengthened and we are removing the stock from Top Picks Live. We have lowered our 2011 EPS by 5¢ to $2.80; target price unchanged at $62.”
Things like patents running out, pricing, legal rulings against them, and lower-than-expected results from SmartStax corn seeds isn't something that can be remedied in the short term, and Monsanto is on a long road to growth as a result, with no quick fixes which will change that.
Major competitor DuPont (NYSE:DD) has also gained market share in an environment where farmers are angry at Monsanto pricing and wondering if the premiums are worth paying for in what is increasingly being perceived as lower yields.
DuPont has successfully marketed the idea of whether or not the higher traits of seeds sold by Monsanto are worth the higher price. A growing number of farmers are saying no.
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