Back to top

Analyst Blog

Monsanto Company (MON - Free Report) recently declared that the U.S. Environmental Protection Agency (‘EPA’) has given a green signal for the usage of its XtendiMax herbicide. It is a less volatile dicamba herbicide and includes the unique VaporGrip technology. The company stated that the herbicide can be used with its Bollgard II XtendFlex cotton and with Roundup Ready 2 Xtend soybeans. In-crop usage of XtendiMax would help farmers to use dicamba in Roundup Ready Xtend Crop System (pending for state sanctions) from 2017.

Monsanto believes that farmers have been looking forward to experience the benefits of the Roundup Ready Xtend Crop System, counting in-crop practice of both glyphosate and dicamba. The farmers would be able to control weeds more consistently and flexibility, with Monsanto’s Roundup Ready Xtend Crop System.

Hence, it would be supporting in maximizing their crop yields. Monsanto estimates that the acreage of Bollgard II XtendFlex cotton and million Roundup Ready 2 Xtend soybean would be more than 3 and 15 million respectively, in 2017.

Monsanto believes that its XtendiMax dicamba herbicide would be widely accepted by the growers as it would be an economical as well as effective weed-control tool.

Existing Scenario

Monsanto accepted Bayer AG’s (BAYRY - Free Report) buyout offer worth $66 billion, inclusive of debt in Sep 2016. The company perceives that the grouping of Bayer would unlock the next tranche of opportunities and growth for its business. The deal is currently subjected to regulatory approvals but the companies expect to accomplish it by the fall of fiscal 2017.

However, at present, Monsanto carries a Zacks Rank #5 (Strong Sell) due to some major headwinds. External factors such as stiff industry rivalry, a stronger U.S. dollar, weak agricultural product prices and a low cyclical phase in the agricultural industry are currently hurting the company’s revenues and profitability.

Monsanto’s stock price was $98.94 per share as of Nov 9, 2016.

Better-Ranked Stocks that Warrant a Look

Some better-ranked stocks within the industry that warrant a look include:

Coeur Mining, Inc. (CDE - Free Report) currently carries a Zacks Rank #1 (Strong Buy) and has an average positive earnings surprise of 277.67% over the four trailing quarters. You can see the complete list of today’s Zacks #1 Rank stocks here.

Celanese Corp. (CE - Free Report) currently carries a Zacks Rank #2 (Buy) and has an average positive earnings surprise of 7.08% over the last four quarters.

E. I. du Pont de Nemours and Company (DD - Free Report) carries a Zacks Rank #2 and has an average positive earnings surprise of 25.5% over the trailing four quarters.

The Best Place to Start Your Stock Search

Today, you are invited to download the full list of 220 Zacks Rank #1 "Strong Buy" stocks – absolutely free of charge. Since 1988, Zacks Rank #1 stocks have nearly tripled the market, with average gains of +26% per year. Plus, you can access the list of portfolio-killing Zacks Rank #5 "Strong Sells" and other private research. See these stocks free >>