The overall sentiment in the agriculture industry this year is that it will be a positive one, and that bodes well for Monsanto (NYSE:MON), which is expected to get a boost from several catalysts.
Among those elements working in favor of the company are reduced refuge, higher acreage, farming income and deregulation with alfalfa and beets.
Piper Jaffray said in a note to clients, "We maintain our Overweight rating and $95 price target on shares on MON following a round of dealer checks that gives us increased confidence in management's guidance for reduced refuge and Roundup Ready 2 Yield (RR2Y) seeds. From these conversations, we believe both reduced refuge and RR2Y beans will meet expectations of mid-teens millions of acres for the 2011 season – with potential EPS upside in the quarter of $0.05 coming from increased acreage + share gains. In addition to volumes, other important levers for upside remain in place, including elevated farm incomes & sentiment, and beet & alfalfa deregulation."
Monsanto was trading at $73.05, gaining $0.79, or 1.09 percent, as of 2:34 PM EDT. Piper Jaffray has a price target on $95 on Monsanto and an "Overweight" rating.
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