- Monsanto (MON +0.7%) is upgraded to Neutral from Underweight with a $120 price target at Atlantic Equities, which believes a potential deal with Syngenta could bring in strategic and financial benefits, and the firm believes ag fundamentals are unlikely to see further deterioration.
- However, the firm says MON's core seeds business is meaningfully below the level required to meet management's target of doubling EPS from 2014 to 2019; with low-single-digit growth estimated for 2015, 2016-19 now requires a growth rate significantly above the historic trend to achieve the goal.
- An additional headwind comes in the form of the 35% Y/Y decline in Chinese glyphosate prices, the firm says; despite management proactively seeking alternative means of growth, the company's targets for 2019 increasingly would be at risk.