Monsanto Co.(NYSE: MON - News) is heading into its next earnings announcement with estimates on the rise. Shares are trading at solid valuations and the chart is showing a nice level of support.
Company Description
Monsanto is a leading global provider of technology-based solutions and agricultural products for growers and downstream customers, such as grain processors and consumers, in the agricultural markets. The combination of its herbicides, seeds and related genetic trait products provides growers with integrated solutions to more efficiently and cost effectively produce crops at higher yields, while controlling weeds, insects and diseases.
Its base business, led by Roundup and coupled with the latest tools in biotechnology, genomics and molecular breeding. Monsanto is based in St. Louis, has 21,700 employees, and carries a market cap. of $41 billions.
Estimates Climbing As Earnings Report Nears
Monsanto's is ready to announce its first-quarter results for fiscal 2009 on Jan 7. The full-year consensus estimates have been rising consistently over the past 3 months.
Currently the average estimate is expecting earnings of $4.58 during 2009, up from $4.49 over the past 90 days. The consensus for 2010 is now $5.43, up from $5.16 over the same period of time.
These forecasts are calling for year-over-growth of 26% in 2008 and 19% in 2010.
Valuing the Growth
Shares of Monsanto are trading at fair valuations. The P/E of just over 19 times earnings seems on the high side, but with a 19% growth rate factored in, the PEG is 0.8. The industry average for PEG ratio is 0.6.
Acquisitions Completed
On Dec 2 Monsanto announced the completion of a proposed deal to acquired several Brazilian companies. The sugarcane and technology companies are operated by Aly Participacoes, which Monsanto purchased for $290 million in cash.
Carl Casale, EVP of global strategy and operations said 'We look forward to working with our new colleagues at CanaVialis and Alellyx to combine our areas of breeding expertise to enhance yields in sugarcane, a crop that is vital to addressing growing global food and fuel demands.' ..zacks.com
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