Back to top

Analyst Blog

On Oct 8, 2013, we reiterated our Neutral recommendation on Monsanto Company (MON - Analyst Report), based on mixed result for the fourth quarter of fiscal 2013.

Why the Retention?

Monsanto is a leading global provider of agricultural products. The company’s research and development (R&D) line-ups in molecular-bred hybrid technologies as well as technical collaboration with agri-business research firms continue to support sustainability and modernization in cropping pattern for long-term growth. With the Intacta technology gaining momentum in Brazil and Argentina, we expect Monsanto to be able to generate higher revenues in the coming quarters.

Additionally, Monsanto has strong cash and cash equivalents balance, which the company intends to utilize for share buybacks, thereby increasing shareholders’ value. The proposed acquisition of The Climate Corporation also strengthens our belief on the company’s future. The integration of Climate’s technology will help Monsanto to expand its Integrated Farming Systems platform along with expanding the R&D pipeline.

However, the company incurs massive time and expenses toward R&D activities, which makes them high priced, thereby exposing the company to major price competition from local generic companies.

Monsanto’s overseas operations expose it to foreign currency fluctuation risk. Further, the foreign operational hazards including changes in local, political or economic conditions; governmental policies and pricing directives; as well as import and trade restrictions in foreign nations add to the peril. Moreover, the increased societal/governmental resistance to genetically modified crops and farmers’ reluctance to accept new products remain the major offsetting factors.

Other Stocks to Consider

Monsanto currently carries a Zacks Rank #3 (Hold). Other stocks worth a watch in the industry include Limoneira Company (LMNR - Snapshot Report), Ferro Corp. (FOE - Snapshot Report) and Air Products & Chemicals Inc. (APD - Analyst Report). While Limoneira and Ferro Corp. carry a Zacks Rank #1 (Strong Buy), Air Products & Chemicals carries a Zacks Rank #2 (Buy).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
SUPER MICRO… SMCI 26.67 +8.90%
CENTURY ALU… CENX 26.71 +6.93%
CANADIAN SO… CSIQ 37.75 +6.52%
BANCO DO BR… BDORY 16.42 +5.70%
AROTECH COR… ARTX 3.77 +5.17%