Piper Jaffray Reiterates Overweight Rating on Monsanto (MON)

Piper Jaffray is out with a research report this morning, where it reiterates its Overweight rating on Monsanto Co. MON; it has an $81.00 price target on the stock. The Piper Jaffray analysts cited the company's Q1 results, which included a modest top-line beat and EPS that were in-line with PJC & Street expectations. Management was particularly upbeat about the implications on the fall order book from the early harvest and elevated grain prices, citing an important uptick in the percentage of seeds that were prepaid. The analysts said that they continue to see the several levers for upside in FY11 including broader adoption of Roundup Ready 2 Soybeans and rising global raw material costs leading to elevated glyphosate prices. As for valuation, the analysts remarked, “We use a sum of parts valuation methodology with 25x our FY12 EPS estimates for seed and 12x our FY12 EPS for herbicides.”