Agriculture Earnings Duel: Mosaic vs. Monsanto (MOS, MON, MOO)

This week we’ll get to see two important earnings reports out of agriculture leaders.   Wednesday we’ll get to see earnings out of Monsanto Co. (NYSE: MON). Two key calls of late are that Goldman Sachs raised its sector expectations for the group with key earnings visibility.  Jim Cramer has also been staying high on agriculture. 

The estimates from First Call on Monsanto Co. (NYSE: MON) are $1.69 EPS on $3.56 billion in revenues.  Next quarter estimates are $1.29 EPS on $3.69 billion in revenues. Estimates for fiscal Aug-2008 are $3.18 EPS on $11.04 billion in revenues.  Monsanto did just recently guide higher because its stock had come off of highs considerably.  Analysts have an average price target of $139.00, and Monsanto’s 52-week trading range is $53.95 to $129.28.  Since the end of 2007, Monsanto shares are up about 3%.  Its market cap is now roughly $62 Billion.

Friday we’ll get to see earnings out of Mosaic Co. (NYSE: MOS). The estimates from First Call are $0.95 EPS on $1.92 billion in revenues.  Next quarter estimates are $1.55 EPS on $2.55 billion in revenues. Estimates for fiscal May-2008 are $3.90 EPS on $9.01 billion in revenues. Estimates for fiscal May-2009 are $7.40 EPS on $12.23 billion in revenues.  Analysts have an average price target north of $122.00 and Mosaic Co.’s 52-week trading range is $25.95 to $119.78.  Since the end of 2007, Mosaic shares are up about 11%.  Its market cap is now almost $47 Billion.

On Monday, the USDA gives the Clarence Beeks crops report showing total numbers of acreage expected to be planted, and this may create many last minute revisions to each earnings report for anything tied to agriculture suppliers from seed to machinery to transportation.  As these companies are key contributors to the cop growers, these agriculture firms should already have at least a rough estimate of what is likely.  Lastly, investors may want to watch the Market Vectors Global Agribusiness ETF (AMEX: MOO) as the key ETF in the sector.  Of the total estimated percentage of the ETF’s assets, Monsanto comprises 8.4% of assets and Mosaic comprises 8.5% of the assets.

Jon C. Ogg
March 30, 2008

Jon Ogg produces the Special Situation Investing Newsletter and he can be reached at [email protected]; he does not own securities in the companies he covers.