Citigroup (NYse:C), in general, likes the direction DuPont Co. (NYSE:DD) is taking, along with their performance, and while maintaining a "Hold" rating on them, increased their price target.
"Excluding pharma, PTOI rose 33%, while pharma income exceeded our expectations. Although Ag results were below our estimates, DD announced its North America corn share rose 3% to 35% & its share in soy rose 5% to 31%. DD reported continued electronics strength as sales rose 30% Y/Y on 24% higher volumes," said Citi.
DuPont closed Wednesday at $46.96, losing $0.26, or 0.55 percent. Citigroup has a price target of $50 on them, raising it from $44.
Showing posts with label DuPont. Show all posts
Showing posts with label DuPont. Show all posts
Thursday, October 28, 2010
Tuesday, October 26, 2010
DuPont (NYSE:DD) Raises Guidance as Company Beats Estimates
DuPont (NYSE:DD) exceeded analysts' expectations according to their quarterly report, although the were far behind their performance last year in the same quarter.
Earnings for the third quarter reached $367 million, or 40 cents a share, dropping from $409 million, or 45 cents a share in 2009's third quarter. Analysts were looking for 34 cents a share on sales of $6.72 million.
Revenue did increase, growing to $7 billion, an increase of almost 15 percent.
DuPont Chair and CEO Ellen Kullman said, "I am proud of our business teams' performance this quarter, with segment pre-tax earnings up 33 percent excluding Pharmaceuticals income. DuPont's market focus and science-based innovations helped drive outstanding sales growth, with all business segments and regions contributing. This quarter's results were complemented by ongoing productivity improvements and rigorous cost management that contributed to profitable growth."
Earnings guidance going forward was raised for the full year 2010 to around $3.10 a share over the previous guidance range of $2.90 a share $3.05 a share.
Earnings for the third quarter reached $367 million, or 40 cents a share, dropping from $409 million, or 45 cents a share in 2009's third quarter. Analysts were looking for 34 cents a share on sales of $6.72 million.
Revenue did increase, growing to $7 billion, an increase of almost 15 percent.
DuPont Chair and CEO Ellen Kullman said, "I am proud of our business teams' performance this quarter, with segment pre-tax earnings up 33 percent excluding Pharmaceuticals income. DuPont's market focus and science-based innovations helped drive outstanding sales growth, with all business segments and regions contributing. This quarter's results were complemented by ongoing productivity improvements and rigorous cost management that contributed to profitable growth."
Earnings guidance going forward was raised for the full year 2010 to around $3.10 a share over the previous guidance range of $2.90 a share $3.05 a share.
Tuesday, October 19, 2010
Will Monsanto (NYSE:MON) Be Best Stock of 2011 after Worst of 2010?
Monsanto (NYSE:MON) has been beat up so much this year that the question of whether or not it may be the worst stock of 2010 has been proffered by some commentators and analysts.
While there has been some market factors involved with the poor performance of the stock, such as disappointing results from it SmartStax corn, its sugar beets being put on hold be a judge until more thorough research has been performed, prices too high in a recessionary environment, and the appearance of, and in some cases, actions, showing there is an arrogance there that the company needs to rein in. One being suing farmers who had seed from neighboring farms of Monsanto coming on their land and Monsanto saying they should have to pay for them.
There has also been some inroads into the market share of some Monsanto seeds by competitor DuPont (NYSE:DD), and of course the loss of patents and market share to products now being offered at commodity prices.
Even with all that stuff that sound ominous, there are numerous other products which make Monsanto still the giant in the field, with little in the way of competition which will knock them out of that spot in the short- or mid-term. It is there's to hold onto if they want to remain the market leader.
What that leads to is their performance this year. While some have openly wondered why Monsanto is performing as they are, they are largely technical analysts who don't understand the public relations side, or simply ignore it.
In today's digital media world, those who don't approve of genetically modified seed and other Monsanto products, can make a lot of noise beyond their numbers to give the appearance of a groundswell of opposition, when in reality it's more noise than a real grass roots uprising.
That's not to say opposition isn't real and effective, just that it's not as big as it seems, and it doesn't stop Monsanto from opening up new markets.
With a company like Monsanto an investor must look past the news that will always be there and look at their pipeline and competitive advantage.
In other words, don't read media stories and assume because there is controversy that the company is doing poorly. Look at their actual performance and whether they're valued closed to what they should be.
For 2010 Monsanto is down over 33 percent, which isn't a reflection of their actual or future performance. While the SmartStax corn seed is important and a part of the reason for such negative share performance. It is because it was considered the major engine of growth in the short-term of the company.
It's not that it isn't a good product, but it hasn't measured up to expectations, and the company has rightly paid the price for it. But it seems there may have been far too much focus on that, by both the company and investors, so the company took a big hit when results showed it wasn't up to par.
But in a relatively short time the price of corn has skyrocketed because of corn yields being lower than expected, so the reasons farmers were disgruntled and pulling back before, which related to whether or not paying the higher price was worth the yield, are pretty much gone with the higher corn prices, and Monsanto could generate higher sales for the spring planting because of that.
New markets are also opening up via approval of Monsanto products, especially in Latin America markets; specifically Brazil and Argentina. Once they gain approval to sell products overseas, Brazil will plant large amounts of Monsanto seed to meet the demand.
The bottom line is Monsanto is so out of favor that it's due for a rebound, and although there are obvious challenges, the underlying fundamentals are still in place. And when they do take off, they could soar.
While there has been some market factors involved with the poor performance of the stock, such as disappointing results from it SmartStax corn, its sugar beets being put on hold be a judge until more thorough research has been performed, prices too high in a recessionary environment, and the appearance of, and in some cases, actions, showing there is an arrogance there that the company needs to rein in. One being suing farmers who had seed from neighboring farms of Monsanto coming on their land and Monsanto saying they should have to pay for them.
There has also been some inroads into the market share of some Monsanto seeds by competitor DuPont (NYSE:DD), and of course the loss of patents and market share to products now being offered at commodity prices.
Even with all that stuff that sound ominous, there are numerous other products which make Monsanto still the giant in the field, with little in the way of competition which will knock them out of that spot in the short- or mid-term. It is there's to hold onto if they want to remain the market leader.
What that leads to is their performance this year. While some have openly wondered why Monsanto is performing as they are, they are largely technical analysts who don't understand the public relations side, or simply ignore it.
In today's digital media world, those who don't approve of genetically modified seed and other Monsanto products, can make a lot of noise beyond their numbers to give the appearance of a groundswell of opposition, when in reality it's more noise than a real grass roots uprising.
That's not to say opposition isn't real and effective, just that it's not as big as it seems, and it doesn't stop Monsanto from opening up new markets.
With a company like Monsanto an investor must look past the news that will always be there and look at their pipeline and competitive advantage.
In other words, don't read media stories and assume because there is controversy that the company is doing poorly. Look at their actual performance and whether they're valued closed to what they should be.
For 2010 Monsanto is down over 33 percent, which isn't a reflection of their actual or future performance. While the SmartStax corn seed is important and a part of the reason for such negative share performance. It is because it was considered the major engine of growth in the short-term of the company.
It's not that it isn't a good product, but it hasn't measured up to expectations, and the company has rightly paid the price for it. But it seems there may have been far too much focus on that, by both the company and investors, so the company took a big hit when results showed it wasn't up to par.
But in a relatively short time the price of corn has skyrocketed because of corn yields being lower than expected, so the reasons farmers were disgruntled and pulling back before, which related to whether or not paying the higher price was worth the yield, are pretty much gone with the higher corn prices, and Monsanto could generate higher sales for the spring planting because of that.
New markets are also opening up via approval of Monsanto products, especially in Latin America markets; specifically Brazil and Argentina. Once they gain approval to sell products overseas, Brazil will plant large amounts of Monsanto seed to meet the demand.
The bottom line is Monsanto is so out of favor that it's due for a rebound, and although there are obvious challenges, the underlying fundamentals are still in place. And when they do take off, they could soar.
Thursday, October 14, 2010
Monsanto (NYSE:MON), DuPont (NYSE:DD), Dow (NYSE:DOW) Receive Coverage from Credit Agricole (OTC:CRARY)
The soaring price of major grains corn, soybeans and wheat has a number of agriculturally related stock generating interest, as they soar in price, including firms like Monsanto (NYSE:MON), DuPont (NYSE:DD) and Dow Chemical(NYSE:DOW), which have had coverage initiated on them by Credit Agricole (OTC:CRARY).
Lower estimated crop yields in the sector are the reasons behind the surge in prices.
Monsanto and its nemesis DuPont were both started off with "Outperform," while Dow Chemical received an "Underperform" rating from Credit Agricole.
Dow Chemical closed the trading session on Wednesday at $29.82, rising a penny, or 0.03 percent. Credit Agricole has a price target of $88 on them.
Dupont finished at $46.88, gaining $0.59, or 1.27 percent. A price target of 54 has been placed on the company.
Monsanto performed the best of the three Wednesday, reaching $54.69, a gain of $2.44, or 4.67 percent. They have a price target of $60 a share.
Lower estimated crop yields in the sector are the reasons behind the surge in prices.
Monsanto and its nemesis DuPont were both started off with "Outperform," while Dow Chemical received an "Underperform" rating from Credit Agricole.
Dow Chemical closed the trading session on Wednesday at $29.82, rising a penny, or 0.03 percent. Credit Agricole has a price target of $88 on them.
Dupont finished at $46.88, gaining $0.59, or 1.27 percent. A price target of 54 has been placed on the company.
Monsanto performed the best of the three Wednesday, reaching $54.69, a gain of $2.44, or 4.67 percent. They have a price target of $60 a share.
Tuesday, October 12, 2010
Monsanto (NYSE:MON) Helped by Lower Corn Yield Projections?
With almost everything going against it, Monsanto (NYSE:MON) may get some help from the recent corn yield estimates which were about 25 percent lower than projected, which should inevitably drive corn prices up even more.
One of the major and successful strategies of DuPont (NYSE:DD) has been to put in the minds of farmers whether or not the added traits of Monsanto's SmartStax corn is worth the extra price.
When early returns from the field revealed yields were lower for SmartStax corn, that added fuel to the fire, and Monsanto is left wondering, along with their shareholders, where future growth was going to come from.
Now that the overall corn yield in the U.S. is far lower than expected, and corn prices sure to increase, that leaves higher margins for farmers to work with, which may persuade them to give Monsanto another try.
Of course DuPont will probably respond to that challenge and lower their prices to gain even more market share.
Even so, if yields are enough to generate interest from more northerly fields, which haven't revealed results yet, Monsanto just may get an unexpected boost from higher corn prices.
That could also include higher soybean prices as well, where soybean yields are over 20 percent lower than estimates too.
One of the major and successful strategies of DuPont (NYSE:DD) has been to put in the minds of farmers whether or not the added traits of Monsanto's SmartStax corn is worth the extra price.
When early returns from the field revealed yields were lower for SmartStax corn, that added fuel to the fire, and Monsanto is left wondering, along with their shareholders, where future growth was going to come from.
Now that the overall corn yield in the U.S. is far lower than expected, and corn prices sure to increase, that leaves higher margins for farmers to work with, which may persuade them to give Monsanto another try.
Of course DuPont will probably respond to that challenge and lower their prices to gain even more market share.
Even so, if yields are enough to generate interest from more northerly fields, which haven't revealed results yet, Monsanto just may get an unexpected boost from higher corn prices.
That could also include higher soybean prices as well, where soybean yields are over 20 percent lower than estimates too.
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.
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.
Thursday, October 7, 2010
Citigroup (NYSE:C) Reiterates "Buy" on Monsanto (NYSE:MON)
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.
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.
Friday, September 24, 2010
Susquehanna Initiates Coverage on DuPont (NYSE:DD)
Susquehanna initiated coverage on EI DuPont de Nemours & Co. (NYSE:
DD), giving them a "Positive" rating, believing their strong performance will not subside.
Even with the outperformance through August, the company says they should continue to perform at these levels, citing low P/E in comparison to peers as well as low historical averages.
Also noted were the structural changes by DuPont's CEO which should continue to position them to meet their growth and earnings guidance.
DuPont has shown that in the seed business, where they've made an end-run around Monsanto (NYSE:MON) and gained market share against superior seeds with more traits, by emphasizing price and taking advantage of disgruntled farmers.
They did it by asking farmers if the numerous traits of Monsanto were worth the extra cost. A growing number of farmers don't believe it is.
DuPont Closed Thursday at $44.42, dropping $0.20, or 0.45 percent.
The firm has a 12-month price target of $52 on DuPont.
DD), giving them a "Positive" rating, believing their strong performance will not subside.
Even with the outperformance through August, the company says they should continue to perform at these levels, citing low P/E in comparison to peers as well as low historical averages.
Also noted were the structural changes by DuPont's CEO which should continue to position them to meet their growth and earnings guidance.
DuPont has shown that in the seed business, where they've made an end-run around Monsanto (NYSE:MON) and gained market share against superior seeds with more traits, by emphasizing price and taking advantage of disgruntled farmers.
They did it by asking farmers if the numerous traits of Monsanto were worth the extra cost. A growing number of farmers don't believe it is.
DuPont Closed Thursday at $44.42, dropping $0.20, or 0.45 percent.
The firm has a 12-month price target of $52 on DuPont.
Thursday, September 16, 2010
Monsanto (NYSE:MON) Says Corn Data Shows Higher Yield than Competitors
Monsanto (NYSE:MON) claims early harvest data from corn seed products reveal their products are outproducing their competitors' products.
While data is incomplete at this time, one of note that does seem to be doing well is its Genuity VT Triple PRO Corn, which is used to control earworms.
That product has produced and average yield of 8.5 more bushels of corn an acre than their competitors in 1,400 comparisons.
At a Credit Suisse (NYSE:CS) chemical and agriculture conference, Brett Begemann, Monsanto's executive vice president of seeds and traits said,"Eight and a half bushels is pretty significant... a really positive outcome."
Monsanto made the announcement a day after chief rival DuPont (NYSE:DD) said they are gaining in market share in the soybean and corn seed markets.
DuPont has been branding itself as a lower cost competitor with less traits in a seed, but which does the job needed. They present the question to farmers of whether they really need the extra traits included with Monsanto seeds.
If there aren't higher yields at similar costs, the answer is of course no, and some farmers, especially with its Roundup Ready soybeans, aren't convinced they're getting better results, even with the higher cost seeds.
Monsanto has responded by lowering costs, while interestingly, DuPont has recently upped the cost of its seeds, although they're still lower in price than Monsanto's
Yields reportedly need to be at least a bushel or more an acre to justify the higher price.
While data is incomplete at this time, one of note that does seem to be doing well is its Genuity VT Triple PRO Corn, which is used to control earworms.
That product has produced and average yield of 8.5 more bushels of corn an acre than their competitors in 1,400 comparisons.
At a Credit Suisse (NYSE:CS) chemical and agriculture conference, Brett Begemann, Monsanto's executive vice president of seeds and traits said,"Eight and a half bushels is pretty significant... a really positive outcome."
Monsanto made the announcement a day after chief rival DuPont (NYSE:DD) said they are gaining in market share in the soybean and corn seed markets.
DuPont has been branding itself as a lower cost competitor with less traits in a seed, but which does the job needed. They present the question to farmers of whether they really need the extra traits included with Monsanto seeds.
If there aren't higher yields at similar costs, the answer is of course no, and some farmers, especially with its Roundup Ready soybeans, aren't convinced they're getting better results, even with the higher cost seeds.
Monsanto has responded by lowering costs, while interestingly, DuPont has recently upped the cost of its seeds, although they're still lower in price than Monsanto's
Yields reportedly need to be at least a bushel or more an acre to justify the higher price.
Tuesday, September 7, 2010
Monsanto (NYSE:MON) Under Investigation for Marketing Practices
The Attorney General of Arkansas, Dustin McDaniel, has launched an inquiry into how Monsanto (NYSE:MON) has marketed its Roundup Ready 2 Yield soybean trait.
McDaniel is asking for Monsanto to back up its claims the higher number of trait indeed product higher yields than lower cost competitor seeds, which have less traits.
This sounds like a DuPont (NYSE:DD)-inspired investigation, as their Pioneer seeds are the major low-cost competitor against Monsanto, and have been competing on price versus the number of traits offered by Monsanto as their strategy for gaining market share.
Monsanto recently cited the higher yields as a reason for their announcement they're going to raise prices on the soybean seed, which evidently instigated the inquiry.
But I'm not sure why Monsanto would have an investigation against them, as they can put whatever price they want on the seeds, and farmers can decide if they want to buy them or not.
The other odd thing, is Monsanto claims there were no farmers in Arkansas who planted the soybean seeds in 2009, which if true, makes it strange that the attorney general for Arkansas would have any legal interest in the company at all.
McDaniel is asking for Monsanto to back up its claims the higher number of trait indeed product higher yields than lower cost competitor seeds, which have less traits.
This sounds like a DuPont (NYSE:DD)-inspired investigation, as their Pioneer seeds are the major low-cost competitor against Monsanto, and have been competing on price versus the number of traits offered by Monsanto as their strategy for gaining market share.
Monsanto recently cited the higher yields as a reason for their announcement they're going to raise prices on the soybean seed, which evidently instigated the inquiry.
But I'm not sure why Monsanto would have an investigation against them, as they can put whatever price they want on the seeds, and farmers can decide if they want to buy them or not.
The other odd thing, is Monsanto claims there were no farmers in Arkansas who planted the soybean seeds in 2009, which if true, makes it strange that the attorney general for Arkansas would have any legal interest in the company at all.
Thursday, September 2, 2010
Morgan Joseph Maintains "Buy" on Monsanto (NYSE:MON)
Morgan Joseph reiterated its "Buy" rating on Monsanto (NYSE: MON), while having a price target of $60 on the seed company.
"We believe any weakness in Monsanto's share price, as we witnessed this week, is a great opportunity to buy this unusual stock, as, in our thinking, not only has management overcome a lot of bad news, but it has also developed a dramatic line of growth into the future," said a Morgan analyst.
Revenue doesn't seem to be the problem, but margins and earnings, as pressures on Roundup from patents ending, along with being forced to lower new seed product prices in response to outcry's from farmers, and Dupont (NYSE:DD) marketing their seeds as low-cost alternatives.
Another factor is the cost of research in development, which is the key to future success for Monsanto, but which also cuts into margins and earnings as well.
DuPont is putting the question in the minds of farmers whether or not that added traits of Monsanto seeds are worth the additional costs.
"We believe any weakness in Monsanto's share price, as we witnessed this week, is a great opportunity to buy this unusual stock, as, in our thinking, not only has management overcome a lot of bad news, but it has also developed a dramatic line of growth into the future," said a Morgan analyst.
Revenue doesn't seem to be the problem, but margins and earnings, as pressures on Roundup from patents ending, along with being forced to lower new seed product prices in response to outcry's from farmers, and Dupont (NYSE:DD) marketing their seeds as low-cost alternatives.
Another factor is the cost of research in development, which is the key to future success for Monsanto, but which also cuts into margins and earnings as well.
DuPont is putting the question in the minds of farmers whether or not that added traits of Monsanto seeds are worth the additional costs.
Morningstar (Nasdaq:MORN) Begins Monsanto (NYSE:MON) Coverage
Morningstar (Nasdaq:MORN) has initiated credit coverage on Monsanto (NYSE:MON), issuing a rating of A+ to begin with.
From a credit perspective, Morningstar said they like what they see with Monsanto. Their credit-relevant ratios are strong, and even with the downward revisement in earnings, they still have "excellent profitability."
Some challenges Morningstar sees are antitrust issues, ongoing high research costs, and not a high amount of diversification.
Their Roundup herbicide business will continue to be under pressure, as China imports have undermined earnings because of patents running out, although that was expected.
On their newer products, an unexpected challenge from DuPont (NYSE:DD) has put added pressure on them, as the weak ecomony allows them to put the idea in minds of farmers on whether or not they need the pricey traits of Monsanto seeds.
DuPont offers some seeds at far less price, and with fewer traits in them. A significant number of farmers have responded and went that route, putting pressure on earnings there as well, with Monsanto responding by slashing prices in order to get farmers to at least try their newest offerings.
Moringstar says they still like the strong moat Monsanto has built, but it does have some weaknesses now, and DuPont is positioned to take advantage of that if they falter in any way.
This is why as far as credit issues go, research and development costs are so important, as Monsanto must get results there to be able to be profitable for the long term. That's no guarantee, and until the economy changes, pricing will be a major issue for the seed giant.
From a credit perspective, Morningstar said they like what they see with Monsanto. Their credit-relevant ratios are strong, and even with the downward revisement in earnings, they still have "excellent profitability."
Some challenges Morningstar sees are antitrust issues, ongoing high research costs, and not a high amount of diversification.
Their Roundup herbicide business will continue to be under pressure, as China imports have undermined earnings because of patents running out, although that was expected.
On their newer products, an unexpected challenge from DuPont (NYSE:DD) has put added pressure on them, as the weak ecomony allows them to put the idea in minds of farmers on whether or not they need the pricey traits of Monsanto seeds.
DuPont offers some seeds at far less price, and with fewer traits in them. A significant number of farmers have responded and went that route, putting pressure on earnings there as well, with Monsanto responding by slashing prices in order to get farmers to at least try their newest offerings.
Moringstar says they still like the strong moat Monsanto has built, but it does have some weaknesses now, and DuPont is positioned to take advantage of that if they falter in any way.
This is why as far as credit issues go, research and development costs are so important, as Monsanto must get results there to be able to be profitable for the long term. That's no guarantee, and until the economy changes, pricing will be a major issue for the seed giant.
Wednesday, September 1, 2010
How Will Monsanto (NYSE:MON) Fight Off Competitors?
Monsanto (NYSE:MON) has been on the defensive ever since Roundup came off patent, and it isn't only from cheaper products competing against them, as that was expected.
The major problem is their inability to get premium prices on their new products, which DuPont (NYSE:DD) has especially taken aim at, putting the question to farmers and doubts in their minds if they really need all the extra traits offered by Monsanto.
DuPont is offering competitive products with far less traits, but also at a better price.
It's similar to how many bells and whistles a tech product can add to justify a higher price. Eventually that argument is no longer convincing, and consumers or businesses buy on price rather than an endless array of added bells and whistles, which most probably don't use.
At least that seems to be the strategy of DuPont in their battle with Monsanto.
For Monsanto, they need to convince farmers the added traits of their new seeds are worth the added cost, even though they've had to cut their prices far below what they originally charged for them.
With some patience this will change, as when crop prices rise, historically farmers haven't minded paying the extra cost, but in tighter market it becomes more of a commodity business, and in that regard Monsanto can't compete, and will continue to struggle until prices rise again.
It seems Monsanto has to regroup and promote the strength of their product against competitors, especially after lowering prices. That means focusing on the added value of their seeds against their competitors, where they definitely have an edge.
The major problem is their inability to get premium prices on their new products, which DuPont (NYSE:DD) has especially taken aim at, putting the question to farmers and doubts in their minds if they really need all the extra traits offered by Monsanto.
DuPont is offering competitive products with far less traits, but also at a better price.
It's similar to how many bells and whistles a tech product can add to justify a higher price. Eventually that argument is no longer convincing, and consumers or businesses buy on price rather than an endless array of added bells and whistles, which most probably don't use.
At least that seems to be the strategy of DuPont in their battle with Monsanto.
For Monsanto, they need to convince farmers the added traits of their new seeds are worth the added cost, even though they've had to cut their prices far below what they originally charged for them.
With some patience this will change, as when crop prices rise, historically farmers haven't minded paying the extra cost, but in tighter market it becomes more of a commodity business, and in that regard Monsanto can't compete, and will continue to struggle until prices rise again.
It seems Monsanto has to regroup and promote the strength of their product against competitors, especially after lowering prices. That means focusing on the added value of their seeds against their competitors, where they definitely have an edge.
Tuesday, August 31, 2010
Monsanto (NYSE:MON) Lowers Earnings' Estimate for Year, Cutting Jobs
As the end of their fiscal years comes today, Monsanto (NYSE:MON) has started to manage expectations by lowering their earnings estimates, saying they see things coming in on the low, and not the high end of their projections.
The company will also take a one-time restructuring charge for its latest quarter of $150 million. Monsanto also said they're going to cut up to 700 more jobs as well.
Profits for the year were estimated at a range of $2.40 to $2.60, and are expected to finish the year at $2.40 to $2.45 a share.
In somewhat of a contradiction, the company said they had a "solid" fourth quarter, and gave no reason for the lower numbers.
But it's no secret the major reasons are their faltering "Roundup" herbicide business, and the need to lower prices of new seed products in order to compete; something they haven't had to do much in the past.
The cuts weren't small either, coming in at 75 percent for their Roundup Ready 2 seeds and the 67 percent for their Smartstax seeds.
DuPont (NYSE:DD) has positioned themselves as a low-cost alternative, putting the question in the mind of farmers if they need the extra traits offered by Monsanto, which cost more.
The combination of these two things has been the major factors in lower earnings for Monsanto.
The company will also take a one-time restructuring charge for its latest quarter of $150 million. Monsanto also said they're going to cut up to 700 more jobs as well.
Profits for the year were estimated at a range of $2.40 to $2.60, and are expected to finish the year at $2.40 to $2.45 a share.
In somewhat of a contradiction, the company said they had a "solid" fourth quarter, and gave no reason for the lower numbers.
But it's no secret the major reasons are their faltering "Roundup" herbicide business, and the need to lower prices of new seed products in order to compete; something they haven't had to do much in the past.
The cuts weren't small either, coming in at 75 percent for their Roundup Ready 2 seeds and the 67 percent for their Smartstax seeds.
DuPont (NYSE:DD) has positioned themselves as a low-cost alternative, putting the question in the mind of farmers if they need the extra traits offered by Monsanto, which cost more.
The combination of these two things has been the major factors in lower earnings for Monsanto.
Monday, August 30, 2010
Monsanto (NYSE:MON), DuPont (NYSE:DD) Seed Battle is On!
A battle is heating up between Monsanto (NYSE:MON) and DuPont (NYSE:DD) concerning genetically modified seed, and it not only involves prices, which have been fallen, but the number of traits the seeds offer to farmers.
DuPont has been positioning itself on the lower end, as farmers have been complaining for some time about the high price of Monsanto's seed, as prices had been depressed for a couple of years on their agricultural products.
Farmers weren't as concerned when crop prices had surged, but when profits started to fall, pricing on seed became a big factor.
DuPont challenged Monsanto with their seed with more traits, by going directly to the farmers and asking the question of whether they needed "Triple Stacks," referring to competing seeds from Monsanto.
The question planted doubt in the mind of farmers, and they responded by buying up the lower-tech corn of DuPont via their Pioneer unit, which are less expensive and only carry two genetic traits or less.
Realizing they couldn't compete on traits, DuPont went the pricing direction, which Monsanto handed them by increasing prices on new seeds to a level which opened the door to other options, which benefited DuPont.
After the newest seed products offered by Monsanto fell well short of estimates sales, they had to drastically cut their Roundup Ready 2 seeds by 75 percent, and the Smartstax seeds by 67 percent in order to get farmers to try them out.
Short term, DuPont has won this battle, but as food prices rice again, then farmers may not be as hesitant to pay better prices for Monsanto seeds, and may start considering the traits offered by Monsanto rather than the lower prices of DuPont.
DuPont has been positioning itself on the lower end, as farmers have been complaining for some time about the high price of Monsanto's seed, as prices had been depressed for a couple of years on their agricultural products.
Farmers weren't as concerned when crop prices had surged, but when profits started to fall, pricing on seed became a big factor.
DuPont challenged Monsanto with their seed with more traits, by going directly to the farmers and asking the question of whether they needed "Triple Stacks," referring to competing seeds from Monsanto.
The question planted doubt in the mind of farmers, and they responded by buying up the lower-tech corn of DuPont via their Pioneer unit, which are less expensive and only carry two genetic traits or less.
Realizing they couldn't compete on traits, DuPont went the pricing direction, which Monsanto handed them by increasing prices on new seeds to a level which opened the door to other options, which benefited DuPont.
After the newest seed products offered by Monsanto fell well short of estimates sales, they had to drastically cut their Roundup Ready 2 seeds by 75 percent, and the Smartstax seeds by 67 percent in order to get farmers to try them out.
Short term, DuPont has won this battle, but as food prices rice again, then farmers may not be as hesitant to pay better prices for Monsanto seeds, and may start considering the traits offered by Monsanto rather than the lower prices of DuPont.
Tuesday, July 27, 2010
DuPont (NYSE:DD) Raises Guidance, Beats Estimates
DuPont Co. (NYSE:DD) generated profits of $1.17 a share in the second quarter, beating the 94 cents a share analysts had been looking for. The chemical and seed company also increased its earnings guidance for the rest of the year on surging demand for their products.
Original earnings estimates of 2010 were $2.50 to $2.70, which were upwardly revised from $2.90 to $3.05 a share. Analysts were looking for $2.64 a share.
Revenue for the quarter grew to $8.62 billion, gaining 26 percent, with net income coming in at $1.16 billion or $1.26 a share. Last year in the same quarter the company generated $417 million, or 46 cents a share.
Some of the segments where demand increased were crop seeds, plastics, auto paints and solar power materials.
The largest business unit of the company, agriculture, enjoyed a 31 percent increase to $762 million, largely on surging seed sales. Corn sales enjoyed a 2 percent gain in market share in the North American market and a 4 percent gain in soybeans domestically.
Performing even better, as measured by percentages was their electronics and communications unit, which exploded in sales by five times over the same quarter last year, increasing 53 percent. Leading the division was the production of photovoltaic materials and solid growth in Asia.
Original earnings estimates of 2010 were $2.50 to $2.70, which were upwardly revised from $2.90 to $3.05 a share. Analysts were looking for $2.64 a share.
Revenue for the quarter grew to $8.62 billion, gaining 26 percent, with net income coming in at $1.16 billion or $1.26 a share. Last year in the same quarter the company generated $417 million, or 46 cents a share.
Some of the segments where demand increased were crop seeds, plastics, auto paints and solar power materials.
The largest business unit of the company, agriculture, enjoyed a 31 percent increase to $762 million, largely on surging seed sales. Corn sales enjoyed a 2 percent gain in market share in the North American market and a 4 percent gain in soybeans domestically.
Performing even better, as measured by percentages was their electronics and communications unit, which exploded in sales by five times over the same quarter last year, increasing 53 percent. Leading the division was the production of photovoltaic materials and solid growth in Asia.
Monday, July 12, 2010
Agrium (NYSE:AGU) Completes Acquisition of Retail Farm Centers in Argentina
Agrium (NYSE:AGU) (TSE:AGU) said it has completed the acquisition of 24 retail farm centers in Argentina, along with a crop protection facility from competitor DuPont Crop Protection.
This is a nod towards Agrium's expansion strategy for growth in the South American market.
Estimates by Agrium on the annual revenues from the 24 farm centers are around $57 million.
The number of retail farming outlets in South America after the deal will stand at 56, which operate under the brand Agroservicios Pampeanos.
"Not only will (the deal) solidify our current retail presence in Argentina, it will also strengthen existing strategic partnerships and allow us to better meet the needs of the local growers," said Agrium president and CEO Mike Wilson in a press release.
This is a nod towards Agrium's expansion strategy for growth in the South American market.
Estimates by Agrium on the annual revenues from the 24 farm centers are around $57 million.
The number of retail farming outlets in South America after the deal will stand at 56, which operate under the brand Agroservicios Pampeanos.
"Not only will (the deal) solidify our current retail presence in Argentina, it will also strengthen existing strategic partnerships and allow us to better meet the needs of the local growers," said Agrium president and CEO Mike Wilson in a press release.
Monday, May 10, 2010
Monsanto (NYSE:MON) Vs DuPont (NYSE:DD)
The Monsanto (NYSE:MON) Vs DuPont (NYSE:DD) battle is heating up, as what is perceived as a complicated mess by those outside the industry, is said to be a simple case of Dupont's inability to develop its product pipeline to its advantage by Monsanto.
DuPont claims Monsanto is using its patents licensing provision and other tactics to keep the company from developing a generic version of its Roundup Ready product, which they are able to do because the patent is about to run out on it for Monsanto.
According to DuPont, Monsanto is attempting to string out the process in order to force farmers to upgrade to their newest version called Roundup Ready 2 Yield, which could effectively extend the patent out until 2020. The cost of Roundup Ready to is about 40 percent more than its predecessor.
Monsanto says DuPont is attempting to manipulate public opinion in their favor, along with regulators, to gain leverage in their attempt to bypass paying a "fair" licensing fee for their Roundup Ready 1.
Monsanto claims that DuPont developed a genetic trait which doesn't work as good as it should, and so need Roundup Ready 1 to make it work better; the reason DuPont is making all the noise in Monsanto's view.
DuPont claims Monsanto is using its patents licensing provision and other tactics to keep the company from developing a generic version of its Roundup Ready product, which they are able to do because the patent is about to run out on it for Monsanto.
According to DuPont, Monsanto is attempting to string out the process in order to force farmers to upgrade to their newest version called Roundup Ready 2 Yield, which could effectively extend the patent out until 2020. The cost of Roundup Ready to is about 40 percent more than its predecessor.
Monsanto says DuPont is attempting to manipulate public opinion in their favor, along with regulators, to gain leverage in their attempt to bypass paying a "fair" licensing fee for their Roundup Ready 1.
Monsanto claims that DuPont developed a genetic trait which doesn't work as good as it should, and so need Roundup Ready 1 to make it work better; the reason DuPont is making all the noise in Monsanto's view.
Tuesday, April 27, 2010
Caterpillar (NYSE:CAT), Alcoa (NYSE:AA) and DuPont (NYSE:DD) Drive Dow Down
One day stocks like Caterpillar (NYSE:CAT), Alcoa (NYSE:AA) and DuPont (NYSE:DD) can lead the Dow up, and other days it can lead them down, and today it was downwards these stocks led the Dow, as it plunged the most in one day since February 4, declining 213.04 points, or 1.9 percent, to 10991.99.
Caterpillar dropped 4.35 percent, Alcoa 4.34 percent, and DuPont 3.8 percent during regular trading hours.
Most of this is in response to the downgrading of Greek debt to junk status and also the downgrading of Portugal debt down two levels, confirming the European Union problems are far deeper than Greece alone, and is in grave danger of crumbling under the weight of irresponsible monetary practices which gave in to demands of their people for wages and benefits they couldn't afford to offer them in a sustainable way.
Gold was driven up in price as the preferred safety haven in light of the extraordinary sovereign debt challenge facing Europe.
Caterpillar dropped 4.35 percent, Alcoa 4.34 percent, and DuPont 3.8 percent during regular trading hours.
Most of this is in response to the downgrading of Greek debt to junk status and also the downgrading of Portugal debt down two levels, confirming the European Union problems are far deeper than Greece alone, and is in grave danger of crumbling under the weight of irresponsible monetary practices which gave in to demands of their people for wages and benefits they couldn't afford to offer them in a sustainable way.
Gold was driven up in price as the preferred safety haven in light of the extraordinary sovereign debt challenge facing Europe.
Wednesday, April 7, 2010
Bank of America (NYSE:BAC) Upgrades Dupont (NYSE:DD)
Dupont upgraded by Bank of America
Dupont (NYSE:DD) received an upgrade from Bank of America (NYSE:BAC) from neutral to underperform, saying the fundamentals are getting better, which also resulted in the price target being raised from $36 to $40.
Specifically noted by Bank of America were the increase in the industrial business at the company, flexibility of its financing getting better, and the Pioneer seed line looks strong for the first half of 2010.
Bank of America pushed out earnings per share for the next three years, including 2010, looking for $2.30 to $2.35 in 2010; $2.40 to $2.55 in 2011; and $2.65 to $2.80 in 2012.
Dupont (NYSE:DD) received an upgrade from Bank of America (NYSE:BAC) from neutral to underperform, saying the fundamentals are getting better, which also resulted in the price target being raised from $36 to $40.
Specifically noted by Bank of America were the increase in the industrial business at the company, flexibility of its financing getting better, and the Pioneer seed line looks strong for the first half of 2010.
Bank of America pushed out earnings per share for the next three years, including 2010, looking for $2.30 to $2.35 in 2010; $2.40 to $2.55 in 2011; and $2.65 to $2.80 in 2012.
Subscribe to:
Posts (Atom)