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What Do Analysts Expect from Monsanto’s 4Q15 Earnings?

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Oct. 7 2015, Updated 10:08 a.m. ET

What to expect?

Monsanto (MON) is set to release its 4Q15 results on October 7, 2015, before the market opens. In this part of the series, we will look at Wall Street analysts’ estimates for the upcoming earnings. Wall Street analysts are expecting the company to report flat to -$0.02 earnings per share (or EPS) for the quarter.

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Estimates

  • Analysts estimate that Monsanto will report about $2.7 billion in revenue, which would translate into a 6.1% growth compared to $2.6 billion in the corresponding quarter a year ago.
  • Over the past 12 quarters, Monsanto had an average revenue growth of 4.6% year-over-year.
  • Analysts are also estimating an EBITDA (or earnings before interest, tax, depreciation, and amortization) of $257 million. This would translate into an EBITDA margin of 9.5% compared to 1% in the corresponding quarter in 2014.
  • The company is also expected to report a net loss of $377 million compared to a net loss of $5.9 million in the corresponding quarter a year ago. This would result in an EPS of -$0.02 during the quarter.
  • The company has beat analysts’ estimates two times over the past four quarters.

Analyst ratings

  • In light of a weaker outlook, Deutsche Bank reduced its price target for Monsanto from $130 to $110.
  • Of the 25 analysts covering Monsanto, the average price target is $120.
  • The stock is currently trading at $87, which may indicate that the market is more negative about the company’s outlook.

In the next article, we will look at the valuation multiples for Monsanto and its peers DuPont (DD) and Dow Chemicals (DOW). Currently, the VanEck Vectors Agribusiness (MOO) has 7.8% of its holdings in Monsanto and 4.4% of its holdings in Potash Corporation (POT).

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