GOLDMAN RAISES ESTIMATES, PRICE TARGET ON MONSANTO
Goldman Sachs analyst Robert Koort says his Farm Belt contacts lead him to believe that Monsanto Company's (MON) trait prices will be moving up meaningfully for the 2009 growing season. Consequently, he believes the company's Seeds and Traits franchise should benefit from higher trait prices, higher planted corn acreage and increased market share.
Koort also expects RoundUp herbicide prices to keep climbing based on strong global demand and tight supply. He adds that 2009 will see launch of Roundup Ready2Yield next-generation soybeans.
He thinks MON offers a powerful combination of near-term EPS visibility with medium-term pipeline potential. He raises $4.00 fiscal year 2009 (August) EPS estimate to $4.45, $4.80 for fiscal year 2010 to $5.30; and 140 price target to 155. He keeps a buy opinion on the stock.
UBS FINANCIAL DOWNGRADES CSX TO NEUTRAL FROM BUY
UBS Financial analyst Jared Goodman says CSX Corp. (CSX) has been the best of the rail stocks, up about 56% year to date and up 40% since it raised its EPS guidance on March 17.
Goodman says, while the railroads have been the gift that keeps on giving since 2004, he thinks that valuation and sentiment are peaking, that oil prices remain elevated, and that the group is probably due for a pullback.
He keeps his 70 target price, based on a forward p-e of 15.5. He says CSX remains a powerful long-term operational improvement story, but easy wins are moderating.
JPMORGAN REDUCES ESTIMATES FOR SHERWIN-WILLIAMS
JPMorgan analyst Jeffrey Zekauskas says Sherwin-Williams' (SHW) negative volume growth pattern in the first quarter seems to have accelerated and raw material cost inflation is likely to be above 8% for 2008 vs. previous expectations of 4%-8%. The company notes lower architectural paint demand in the contractor and do-it-yourself market reflects decrease in new residential, commercial construction, slow repaint business.
He cuts $4.75 2008 EPS view to $3.90 and $5.35 for 2009 to $4.60. But he keeps overweight opinion.
He says the balance sheet is strong and valuation is supported by high level of free cash flow generation. He adds that SHW is responding to weakening earnings conditions by reducing overhead expenses, eliminating underperforming stores and keeping lid on capital spending.