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Why Monsanto (MON) Is a Must-Add Stock to Your Portfolio

Zacks Equity Research

On Jun 16, we issued an updated research report on premium agricultural chemicals firm, Monsanto Company MON.

Over the last three months, Monsanto’s shares yielded a return of 4.35%, outperforming 2.51% growth recorded by the Zacks classified Agriculture/Products industry.

Notably, the attractiveness of this stock as a current investment choice is supported by its favorable Value Growth Momentum Style Score ‘B’.

Reasons for the Solid Run

Increasing global population has been boosting demand for crop-yield enhancing products offered by Monsanto. Sales of the company’s Roundup Ready 2 Xtend Soybeans, and premium weed and insect control solutions are anticipated to shoot up in the quarters ahead.

Sturdy sales, favorable product pricing and crop acreage area expansion would likely help in augmenting Monsanto’s profitability in the quarters ahead. Notably, the company currently estimates to accrue adjusted earnings (ongoing basis) at the high end of the $4.50–$4.90 per share range, in fiscal 2017.

Monsanto is fortifying its Climate FieldView platform, as well as the existing seed and trait solutions’ portfolio with numerous innovation investments. For instance, the company noted that it has completed the initial phase of its planned $400 million Chesterfield research & development site expansion.

The site, which is likely to commence operations by the end of fiscal 2017, is anticipated to enhance Monsanto’s technological expertise. Additionally, commercialization of the Nemastrike technology (produces non-imitable nematode control solutions) is projected to secure sturdy market response from calendar year 2018.

Monsanto accepted Bayer AG’s BAYRY buyout offer worth $66 billion, inclusive of debt, in Sep 2016. Both the companies estimate to close the deal by the fall of calendar year 2017. Monsanto believes that this deal would unlock a tranche of growth opportunities for its business. Along with Bayer, this Zacks Rank #2 (Buy) company intends to develop advanced integrated optimized solutions for cultivators and cater new offerings in the market, which would be highly beneficial for farmers.

Over the last 60 days, the Zacks Consensus Estimate for the stock has been revised upward for both fiscal 2017 and 2018, indicating positive market sentiments.

Other Stocks to Consider

Some other top-ranked stocks in the industry are listed below:

BASF SE BASFY generated an average positive earnings surprise of 3.02% over the trailing four quarters and currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Chemours Company CC has an average positive earnings surprise of 39.82% for the last four quarters and boasts a Zacks Rank #1 at present.

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