Syngenta AG

Syngenta AG (SYT - Snapshot Report) sees strong growth in the agriculture business with 2009 earnings expected to grow in the high teens. SYT has a PEG of only 0.70.

Company Description

Syngenta is a worldwide agribusiness company with two main products: seeds and crop protection. The Switzerland-based company has employees in 90 countries and is the third largest producer in the high-value commercial seeds market.

On Dec 4, Syngenta and Dow AgroSciences announced a research and development agreement to evaluate current and future Dow AgroSciences compounds for incorporation into Syngenta's seed treatment portfolio.

The companies will attempt to maximize crop vigor and yield in field crops and vegetables. Dow AgroSciences' compounds will be used with Syngenta's portfolio. Products resulting from the collaboration will be commercialized by Syngenta.

Sales Jumped 28% in the Third Quarter

On Oct 23, Syngenta reported third-quarter sales that grew by 28% at constant exchange rates and reported sales increased 33% to $2.3 billion.

Seed sales soared by 41% as sales of corn and soybean more than doubled due to strong growth in Brazil. Vegetables were also strong in all regions, especially Asia.

Crop Protection sales were no slouch either, rising 26% year over year due to volume growth of 12% and higher prices. Sales in Eastern Europe were 50% higher due to a drive to increase productivity. Latin America was also strong, especially in soybean and corn.

"The sales figures we have presented today attest to the strength of our business in a turbulent global environment," said Mike Mack, CEO.

"The fundamental drivers for agriculture remain unchanged, with rising food and feed demand inevitably requiring increased use of agricultural technology in a context of limited land availability," he said.

2008 Guidance Reaffirmed

Given the solid third quarter results, the company confirmed 2008 earnings per share guidance of 35% growth and reaffirmed 2009's target of a gain in the high teens.

Consensus Estimates Rise for 2009

Given the company's guidance, covering analysts are bullish on the full-year 2009. Consensus estimates are up 4 cents to $3.81 per share in the last 60 days. Analysts expect 2009 year-over-year EPS growth of 22.35%.

For 2008, estimates have fallen to $3.11 from $3.13 in the last 2 months. The company reports fourth-quarter and full-year 2008 results on Feb 2, 2009.

Share Repurchase Program Completed

Syngenta announced on Dec 30, 2008 that it had completed the share repurchase program authorized in April 2006. The total number of shares repurchased equaled 9.08% of outstanding shares at the time of the authorization for a total amount of $1.95 billion.

Value Fundamentals

Syngenta is a Zacks #1 Rank (strong buy) stock. It's trading at 9.7x forward earnings. SYT's price-to-book is 2.68. The company also pays a dividend, with a current yield of 3.90%.