Friday, October 8, 2010

Soleil Slashes Earnings on Monsanto (NYSE:MON), Likes DuPont (NYSE:DD) Better

Soleil Securities cut its earnings estimate on Monsanto, saying they see limited upside for the company. They prefer DuPont (NYSE:DD) instead, whom they rate as a "Buy." They maintain a hold on Monsanto, which has lost market share to DuPont in some segments.

Soleil said, "We cut our MON F2011E EPS to $2.65 from $2.75 on several areas of execution risk discussed below. Guidance is for $2.77 and current consensus is for $2.84. We launch a F2012E of $3.05...We favor DuPont
(NYSE:DD). Given limited upside in Monsanto, we see more upside in DuPont
(Buy-rated), which should benefit from Monsanto's execution issues ... Potential catalysts, next year. Three products in Phase IV which
should launch in F2012E: drought-tolerant corn, refuge in a bag, and insect-protected soy in Brazil. But we note that Pioneer should have competitive products for the first two opportunities."

Monsanto could end up with the dubious distinction of being one of the worst performers in 2010.

They could be saved if their SmartStax corn seed performs strongly in the northern states, as Illinois results were below expectations.

Monsanto closed Thursday at $48.83, gaining $0.18, or 0.37 percent. Soleil has a price target of $50 on the seed giant.

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