Monsanto Expands

Recently, Monsanto Company (MON) completed its $200 million expansion just outside of New Orleans. The expansion was started in April 2008 to increase production of the agricultural herbicide - Roundup.

Roundup is one of the world's leading crop protection products. This has been a huge project for Monsanto in scope and in terms of financial investment. This expansion will help boost Roundup production capacity by 20%.

Monsanto is a leading global provider of agricultural products. The company's pipeline of agricultural biotechnology products stands unmatched in the industry.

However, the intense competitive environment and Monsanto's huge dependence on a few large customers pose a risk. Nevertheless, a healthy balance sheet, along with a robust pipeline of new products and the continuous growth in the seeds and genomics segment, appears encouraging.

For fiscal 2010, the Zacks Consensus Estimate is $3.26 per share, compared to $3.78 in fiscal 2009. Monsanto expects full-year 2010 EPS in the range of $3.10 to $3.30. Over the past month, the Zacks Consensus Estimate has fallen from $3.29 to $3.26.

Five out of 16 covering analysts have lowered their estimates. The Zacks Consensus Estimate for fiscal 2011 has also gone down from $4.44 to $4.41 in the last 30 days as 2 out of 16 analysts have lowered their estimates, while only 1 has raised his estimate.

Monsanto remains a Zacks #3 Rank ('hold'), as we believe that its healthy balance sheet, along with a robust pipeline of new products and continuous growth in the seeds and genomics segment, will drive both near term and long-term growth. We also maintain our long-term recommendation of Neutral.

Read the full analyst report on MON