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Monsanto (MON) Continues to Face Headwinds: Time to Sell?

On Mar 24, 2016, we issued an updated research report on premium agro-chemical firm Monsanto Company MON. The company, along with its subsidiaries, ranks among the leading global providers of agricultural products. However, of late, Monsanto is facing certain major headwinds in various domains.

Problems to Consider

Monsanto recently downgraded its full-year fiscal 2016 EPS guidance to a range of $3.42–$4.29 from $5.10–$5.60. The guidance cut came in view of the existing business issues such as currency headwind, generic glyphosate pricing and unfavorable commodity pricing.

Moreover, the company operates in the agricultural industry that is subject to several cyclical fluctuations. At the same time, unfavorable government policies, trade restrictions and operational hazards remain the other concerns. Also, dependence on a few agricultural distributors and intense competition add to the company’s woes.

Slight Scope for Growth

Monsanto has undertaken certain initiatives to boost innovation, increase sales of advanced varieties of soybeans and enhance operational efficacy. In our view, these could offset the negatives to some extent for the Zacks Rank #4 (Sell) stock and aid top-line and bottom-line growth

Stocks to Consider

Some better-ranked stocks within the industry are Cosan Limited CZZ, Limoneira Company LMNR and Syngenta AG SYT. All the three stocks have a Zacks Rank #2 (Buy).

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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
COSAN LTD-A (CZZ): Free Stock Analysis Report
 
SYNGENTA AG-ADR (SYT): Free Stock Analysis Report
 
MONSANTO CO-NEW (MON): Free Stock Analysis Report
 
LIMONEIRA CO (LMNR): Free Stock Analysis Report
 
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