We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Monsanto (MON) is a Must-Add Stock to Your Portfolio?
Read MoreHide Full Article
The equity universe is bullish at the moment, recording post-election gains of roughly 9.9%, 13.1% and 12.6% for the S&P 500, Nasdaq and Dow Jones Industrial Average, respectively. Notably, we find that the broader Materials Select sector SPDR (XLB) has gained 4.16%, since the beginning of this year. The upside has been driven by stellar performances of major materials stocks like Monsanto Company .
Over the last six months, shares of this Zacks Rank #2 (Buy) stock yielded a return of 13.25%, outperforming 9.34% growth recorded by the Zacks categorized Agriculture/Products industry.
Notably, the attractiveness of this stock as a current investment choice is further supported by its favorable Growth Style Score ‘A’.
Reasons for the Solid Run
Bayer AG (BAYRY - Free Report) Deal Prospects: We expect Monsanto’s near-term top- and bottom-line performance to improve on the back of Bayer AG’s buyout deal.
Bayer’s distinct crop protection portfolio, when combined with Monsanto’s popular Climate FieldView and Seeds & Traits platform, would likely give rise to a highly-competitive seeds traits and agricultural chemicals behemoth in the industry.
The largest all-cash deal ($66 billion), which awaits regulatory approvals, is anticipated to close by the end of 2017.
Revenue Growth: In first-quarter fiscal 2017 (ended Nov 30, 2016), Monsanto’s aggregate revenue exceeded the year ago-tally by 19.4%. The stock’s projected sales growth (F1/F0) and (F2/F1) are currently pegged at 4.02% and 1.98%, respectively.
The increasing global population will give rise to demand for agricultural products. This, in turn, is likely to bolster the sales of crop-yield enhancing products offered by Monsanto. Moreover, the company’s portfolio solidification initiatives are anticipated to drive top-line performance in the quarters ahead.
Margin Improvement: Monsanto’s gross margin expanded 690 basis points (bps) to 47.5% in the fiscal first quarter. The company intends to widen its near-term margins on the back of lower costs and greater operational efficacy. It estimates to deliver an annualized cost savings of $380 million by the end of fiscal 2017 from lower cost of goods sold and operating expenses.
Earnings per Share Growth: Monsanto has an impressive positive average earnings surprise of 309.71% for the trailing four quarters. The company is augmenting its bottom line on the back of sturdy revenue growth and improved margins. In the fiscal first quarter, the company’s adjusted earnings came in at 21 cents per share, as compared with the loss of 11 cents recorded in the year-ago period. For fiscal 2017, the company projects earnings within the range of $4.50–$4.90 per share.
Upward Estimate Revisions: Over the past 60 days, the Zacks Consensus Estimate for Monsanto inched up 0.8% to $4.81 for fiscal 2017 and 0.6% to $5.36 for fiscal 2018. The positive earnings estimate revisions indicate positive market sentiments and substantiate the Zacks Rank #2 for the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Notably, the stock’s projected earnings growth rate for fiscal 2018 (F2/F1) is 11.50%, higher than the Agriculture/Products industry’s projected growth rate of 5.80%.
Commitment Toward Shareholders: Monsanto tries to provide higher returns to its shareholders through lucrative dividend offers.
Key Picks
Other similarly-ranked stocks in the industry are listed below:
Albemarle Corporation (ALB - Free Report) has a positive average earnings surprise of 14.28% for the last four quarters.
Arconic Inc. has a positive average earnings surprise of 79.97% for the past four quarters.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Why Monsanto (MON) is a Must-Add Stock to Your Portfolio?
The equity universe is bullish at the moment, recording post-election gains of roughly 9.9%, 13.1% and 12.6% for the S&P 500, Nasdaq and Dow Jones Industrial Average, respectively. Notably, we find that the broader Materials Select sector SPDR (XLB) has gained 4.16%, since the beginning of this year. The upside has been driven by stellar performances of major materials stocks like Monsanto Company .
Over the last six months, shares of this Zacks Rank #2 (Buy) stock yielded a return of 13.25%, outperforming 9.34% growth recorded by the Zacks categorized Agriculture/Products industry.
Notably, the attractiveness of this stock as a current investment choice is further supported by its favorable Growth Style Score ‘A’.
Reasons for the Solid Run
Bayer AG (BAYRY - Free Report) Deal Prospects: We expect Monsanto’s near-term top- and bottom-line performance to improve on the back of Bayer AG’s buyout deal.
Bayer’s distinct crop protection portfolio, when combined with Monsanto’s popular Climate FieldView and Seeds & Traits platform, would likely give rise to a highly-competitive seeds traits and agricultural chemicals behemoth in the industry.
The largest all-cash deal ($66 billion), which awaits regulatory approvals, is anticipated to close by the end of 2017.
Revenue Growth: In first-quarter fiscal 2017 (ended Nov 30, 2016), Monsanto’s aggregate revenue exceeded the year ago-tally by 19.4%. The stock’s projected sales growth (F1/F0) and (F2/F1) are currently pegged at 4.02% and 1.98%, respectively.
The increasing global population will give rise to demand for agricultural products. This, in turn, is likely to bolster the sales of crop-yield enhancing products offered by Monsanto. Moreover, the company’s portfolio solidification initiatives are anticipated to drive top-line performance in the quarters ahead.
Margin Improvement: Monsanto’s gross margin expanded 690 basis points (bps) to 47.5% in the fiscal first quarter. The company intends to widen its near-term margins on the back of lower costs and greater operational efficacy. It estimates to deliver an annualized cost savings of $380 million by the end of fiscal 2017 from lower cost of goods sold and operating expenses.
Earnings per Share Growth: Monsanto has an impressive positive average earnings surprise of 309.71% for the trailing four quarters. The company is augmenting its bottom line on the back of sturdy revenue growth and improved margins. In the fiscal first quarter, the company’s adjusted earnings came in at 21 cents per share, as compared with the loss of 11 cents recorded in the year-ago period. For fiscal 2017, the company projects earnings within the range of $4.50–$4.90 per share.
Upward Estimate Revisions: Over the past 60 days, the Zacks Consensus Estimate for Monsanto inched up 0.8% to $4.81 for fiscal 2017 and 0.6% to $5.36 for fiscal 2018. The positive earnings estimate revisions indicate positive market sentiments and substantiate the Zacks Rank #2 for the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Notably, the stock’s projected earnings growth rate for fiscal 2018 (F2/F1) is 11.50%, higher than the Agriculture/Products industry’s projected growth rate of 5.80%.
Commitment Toward Shareholders: Monsanto tries to provide higher returns to its shareholders through lucrative dividend offers.
Key Picks
Other similarly-ranked stocks in the industry are listed below:
Albemarle Corporation (ALB - Free Report) has a positive average earnings surprise of 14.28% for the last four quarters.
Arconic Inc. has a positive average earnings surprise of 79.97% for the past four quarters.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere
1 billion iPhones in 10 years but a new breakthrough is expected to generate more
than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging
phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may
kick yourself in 2020. Click here for the 6 trades >>