Monsanto (MON) Target Reduced On Pricing Doubts

Specialty chemicals player Monsanto MON is facing pricing concerns that may be a constraint for the stock’s price over the next few quarters. Analyst Laurence Alexander at Jefferies & Company expects Monsanto to reevaluate its glyphosate strategy soon. Currently, glyphosate is expected to contribute only about 7% to EBITDA, compared to nearly 30% in 2006-09. Glyphosate is not the core business, but it could indirectly affect earnings growth. Monsanto's seed pricing concerns are not likely to abate even after price decks are announced later this summer. Jefferies has issued a hold rating on the stock and reduced the price target from $71 to $63.