On May 19, 2016, Zacks Investment Research downgraded Syngenta AG SYT to a Zacks Rank #4 (Sell) from a Zacks Rank #3 (Hold). Going by the Zacks model, companies carrying a Zacks Rank #4 have chances of underperforming in the broader market over the upcoming quarters.
Why the Downgrade?
Lower insecticides sales, fall in glyphosate prices, depressed rice market of Thailand and tight credit conditions in Argentina as well as Brazil have been weighing on Syngenta’s top line in recent times. Being a multinational company, Syngenta is often exposed to unfavorable currency fluctuations. A stronger U.S. dollar has been adversely affecting the company’s foreign revenues and margins in the recent quarters. Moreover, Syngenta operates in the global agricultural industry, which exposes its trade to several cyclical fluctuations owing to climatic variations. Also, marketing of the company's genetically modified traits is often subjected to government regulations and restrictions across various markets. In addition, the company operates in a highly competitive industry, which might diminish its market share in the near future.
Analysts remain cautious on the stock, which is clearly evident from the downward revision in the Zacks Consensus Estimate over the past 90 days. As a result, estimates for the stock fell roughly 1.6% to $3.72 per share for 2016 and 1.5% to $4.02 for 2017.
Stocks to Consider
Some better-ranked stocks in the industry are First Majestic Silver Corp. AG, Antofagasta plc ANFGY and BHP Billiton Limited BHP. All the three companies currently hold a Zacks Rank #2 (Buy).
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