With corn, and by extension - nitrogen fertilizer, rising in price, the best way to play the sector is through Agrium (NYSE:AGU) and CF Industries, says Soleil Securities.
Soleil initiated coverage on Agrium with a "Buy" rating, saying they have an attractive valuation.
"In addition to CF Industries (Buy), we view Agrium as a way to play corn through nitrogen fertilizer...Ag-flation is back. The macro environment is favorable due to low interest rates and a weak dollar. Crop prices are up an average of 50% since June 30 on production-negative and therefore price-positive USDA grain reports ... Even after a 70% move since June 30 compared to a 12% gain in the S&P 500, the shares are now selling just at 12.7x our above-consensus EPS estimate of $6.83 per share."
Agrium Closed Monday at $88.53, gaining $1.31, or 1.50 percent. Soleil has a price target of $100 on them.
Showing posts with label Soleil. Show all posts
Showing posts with label Soleil. Show all posts
Wednesday, October 27, 2010
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.
Monday, September 27, 2010
Soleil Slashes SunPower (Nasdaq:SPWRA) to "Hold" on Share Runup
SunPower Corporation (Nasdaq:SPWRA) was downgraded by Soleil Securities from "Buy" to "Hold," citing the approximate 40 percent surge of the stock over the last month.
Along with a large number of equities, SunPower's rally wasn't based on increased guidance or outlook.
Soleil said, "There has been little to no change in the outlook for the company's earnings over the next two to four quarters - all of the move in SunPower's shares has been multiple driven."
The company said they were concerned that "SunPower is moving toward a greater reliance over time on the downstream installation portion of the photovoltaic business."
The price target for the energy company was raised slightly from $14 to $15.
SunPower closed the week at $13.94, gaining $0.02, or 0.14 percent.
Along with a large number of equities, SunPower's rally wasn't based on increased guidance or outlook.
Soleil said, "There has been little to no change in the outlook for the company's earnings over the next two to four quarters - all of the move in SunPower's shares has been multiple driven."
The company said they were concerned that "SunPower is moving toward a greater reliance over time on the downstream installation portion of the photovoltaic business."
The price target for the energy company was raised slightly from $14 to $15.
SunPower closed the week at $13.94, gaining $0.02, or 0.14 percent.
Friday, September 24, 2010
CF Industries (NYSE:CF) Gets Mixed Coverage
CF Industries (NYSE:CF) has received a lot of coverage from companies lately, with two looking positive at the fertilizer company, and one looking negative, with most investors seeming to believe the negative report rather than the two positive ones.
The damage was done by Dahlman Rose, which downgraded CF in the middle of Thursday's trading session, dropping their rating from "Buy" to "Hold." The stock plunged afterwards.
Soleil on the other hand upgraded CF from "Hold" to "Buy," while raising their price target from $105 to $116.
They said CF "embeds a paired trade: long corn and short natural gas."
Earnings per share for full year 2011 was raised from $8.10 to $9.44 by Soleil.
Susquehanna initiated coverage on CF with a "Positive," citing the strength of their nitrogen business.
The company said they consider CF the "purest" nitrogen play in the North American market.
With nitrogen profits expected to explode by Susquehanna, they believe nitrogen EBITDA could could grow as much as 77 percent in 2010, with 2011 adding another 28 percent.
"CF provides the best leverage to surging corn prices, and our
expectations for a 4 million increase in 2011 corn acreage," said Susquehanna.
They have a price target of $129 on CF.
CF closed at $98.68 Thursday, plummeting $2.75, or 2.71 percent.
The damage was done by Dahlman Rose, which downgraded CF in the middle of Thursday's trading session, dropping their rating from "Buy" to "Hold." The stock plunged afterwards.
Soleil on the other hand upgraded CF from "Hold" to "Buy," while raising their price target from $105 to $116.
They said CF "embeds a paired trade: long corn and short natural gas."
Earnings per share for full year 2011 was raised from $8.10 to $9.44 by Soleil.
Susquehanna initiated coverage on CF with a "Positive," citing the strength of their nitrogen business.
The company said they consider CF the "purest" nitrogen play in the North American market.
With nitrogen profits expected to explode by Susquehanna, they believe nitrogen EBITDA could could grow as much as 77 percent in 2010, with 2011 adding another 28 percent.
"CF provides the best leverage to surging corn prices, and our
expectations for a 4 million increase in 2011 corn acreage," said Susquehanna.
They have a price target of $129 on CF.
CF closed at $98.68 Thursday, plummeting $2.75, or 2.71 percent.
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