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TheStreet Open House

6 Agriculture Stocks With Upside

NEW YORK (TheStreet) -- Syngenta (SYT), Potash Corporation of Saskatchewan (POT), The Mosaic Company (MOS), CF Industries Holdings (CF), Monsanto (MON) and Agrium (AGU) have upside potential of up to 53%, based on analysts' consensus estimate of 12-month price targets.

These six stocks likely will profit from higher demand for agricultural inputs. With minimum market capitalization of $10 billion, and based on respective 12-month price targets, analysts expect them to outperform their peers and the broader markets. The stocks have high mean buy rating of 58% and are estimated to deliver 26% to 53% returns over the next one year.


6. Syngenta (SYT) is a $25 billion agri-business company operating in the seeds and crop protection business.

Syngenta reported 12% increase in sales for the first half of 2011, on constant currency basis. Crop protection sales, accounting for three-fourths of sales, were up 10%, with 12% coming from volume growth. Seeds sales registered a growth of 17% with 15% coming from volume.

Net income rose to $1.43 billion, up 14% from the corresponding period in 2010. Gross margin stood at 28.3%, narrowing 30 bps from the first half of 2010 on lower crop protection, pricing and increase in operating costs.

On the business opportunities, Mike Mack, the company's CEO, commented, "As we enter the second half of the year, a positive outlook for the main Latin American season starting in September is underpinned by favorable fundamentals. We also expect further expansion in Asia Pacific and look forward to continuing strong growth in volumes with further gains in market share across the business. We expect to generate 2011 full year free cash flow in excess of $1 billion. In addition, the outlook for pricing for the rest of the year is positive and we expect stable pricing for the full year. For the 2012 season, we are currently raising prices across the business with the aim of achieving an overall increase in the mid single digits."

Of the seven analysts covering the stock, 43% recommend a buy and 43% rate it a hold. On average, analysts estimate 26% upside and the stock is trading at 13.4 times its 2011 earnings.

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