Monsanto climbs premarket as Goldman raises target, expecting higher seed and corn prices
NEW YORK (AP) -- Shares of Monsanto Co. climbed in premarket trading on Tuesday after a Goldman Sachs analyst raised his price target on the agricultural products company, predicting it will benefit from higher prices.
The stock rose $2.95 to $131.50 before the opening bell.
Robert Koort raised his target $15 to $155, saying the company's seeds and traits franchise will benefit from higher prices, larger planted corn acreage and increased market share. Steeper corn prices are the primary driver of higher prices, Koort said.
The analyst also saw the company benefiting from rising prices for its RoundUp herbicide due to greater global demand and tighter supply. He expects a 10 percent price hike.
In late May, Monsanto predicted its gross profit would more than double by 2012 due to increasing productivity and yields to farmers. In 2007, the St. Louis company's gross profit was $4.29 billion.
Koort's new price target implies an expected return of 21 percent on Monday's close of $128.55.
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