Will This Price Target Decrease Hurt Monsanto (MON) Stock Today?

NEW YORK (TheStreet) -- Monsanto Co.'s (MON) price target was lowered to $141 from $148 at Credit Suisse (CS) on Monday.

The firm said it cut its numbers on the company, which provides agricultural products to farmers, based on an expected reduction in corn volumes.

The firm also lowered its full-year 2014 earnings per share estimates to $5.22 from $5.25, and its full-year 2015 EPS forecast to $5.90 from $6.60.

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Separately, 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 revenue growth, largely solid financial position with reasonable debt levels by most measures, expanding profit margins, notable return on equity and reasonable valuation levels. 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:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 7.8%. Since the same quarter one year prior, revenues slightly increased by 0.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • MON's debt-to-equity ratio is very low at 0.22 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, MON has a quick ratio of 1.76, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for MONSANTO CO is rather high; currently it is at 58.96%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 20.18% is above that of the industry average.
  • MONSANTO CO' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. 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 ($5.22 versus $4.56).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Chemicals industry and the overall market on the basis of return on equity, MONSANTO CO has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
  • You can view the full analysis from the report here: MON Ratings Report

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