Monsanto And BASF Expand Their Biotechnology Collaboration

Analysts at Jefferies & Co maintain their "hold" rating on Monsanto MON. The target price for MON is set to $52. Monsanto and BASF announced yesterday the companies would expand their biotechnology research collaboration to include wheat. According to Jefferies & Co, “Initial research efforts will be concentrated in developing wheat traits for the North American and Australian markets. The first jointly developed yield-enhanced wheat product is expected to be commercialized after 2020.” “Monsanto reestablished a position in wheat with its July 2009 acquisition of WestBred, LLC, an $8.5m sales, $1.5m EBIT wheat seed business…. Monsanto's wheat germplasm platform will not be accretive to earnings until 2016 or later,” the analysts mention. Jefferies adds, “The Monsanto-BASF JV focuses on yield and stress tolerance traits for corn, soybeans, cotton and canola, in addition to wheat. Projects currently in the collaboration pipeline with identified market opportunities offer a combined $1.75-$3.0bn in potential revenue by 2020… Monsanto captures 60% of the JV profits and BASF 40%.” More Analyst Ratings here