NEW YORK (TheStreet) -- Shares of Monsanto Co. (MON - Get Report) are up 6.11% to $127.98 in early trading after it raised its full-year 2014 outlook to the upper end of its previous guidance in the range of $5.10 to $5.20 from $5.00 to $5.20.
The maker of genetically engineered seeds also announced a $10 billion share buyback program and said it planned to double earnings over the next five years.
In the fiscal third quarter it reported net profit of $858 million, or $1.62 a share, down from $909 million, or $1.68 a share, in the same period a year ago.
TheStreet Ratings team rates MONSANTO CO as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate MONSANTO CO (MON) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, increase in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- MONSANTO CO has improved earnings per share by 15.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, MONSANTO CO increased its bottom line by earning $4.56 versus $3.78 in the prior year. This year, the market expects an improvement in earnings ($5.25 versus $4.56).
- The net income growth from the same quarter one year ago has significantly exceeded that of the Chemicals industry average, but is less than that of the S&P 500. The net income increased by 12.6% when compared to the same quarter one year prior, going from $1,483.00 million to $1,670.00 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 11.1%. Since the same quarter one year prior, revenues slightly increased by 6.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- MON's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.39, which illustrates the ability to avoid short-term cash problems.
- The gross profit margin for MONSANTO CO is rather high; currently it is at 62.02%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 28.63% significantly outperformed against the industry average.
- You can view the full analysis from the report here: MON Ratings Report