Farmers Rely On Syngenta In Their Fields
The boom in corn planting has been a boon to Syngenta (SYT ), a Swiss seed and crop-protection company based in Basel. Its stock has jumped 34%, to 39.17 in the 13 months since the company was featured in this column on Mar. 13, 2006. Some analysts see more upside ahead. The brisk demand for corn to make ethanol is boosting farmers' need for Syngenta products to thwart field pests such as corn rootworm. Syngenta Chief Financial Officer Domenico Scala says 2007 will be a "volume growth story" driven by an improved farm market. He says Syngenta, which posted sales of $8 billion in 2006, expects to return to shareholders $800 million in 2007 through increases in dividends and share buybacks. Patrick Lambert of Swiss broker Cheuvreux sees earnings of $12.35 a share in 2007 (before special charges), up from $10.96 in 2006. His 12-month stock price target is 54. Alexandre Pasini of Bank Vontobel says 2007 will be a strong year as U.S. corn acreage is forecast to rise 8%. This will lift commodity prices and lead to favorable planting conditions. He rates the stock "outperform."
Note: Unless otherwise noted, neither the sources cited in Inside Wall Street nor their firms hold positions in the stocks under discussion. Similarly, they have no investment banking or other financial relationships with them.
By Gene G. Marcial