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Monsanto Has a Brutal 2010

For related articles and more information, please visit OCA's Genetic Engineering page and our Millions Against Monsanto page.

With a virtual stranglehold on U.S. soybean and corn seed sales and an 18 percent world market share, Monsanto Co. enjoyed a position that was unquestioned until 2009. Since then the agricultural giant has suffered several blows that cut its net earnings nearly in half within a single year. Now, after restructuring its operations, Monsanto has dug in its heels and is looking towards the future.

While the St. Louis-based company has begun to rebound in its current fiscal year ending in August, and is expected to grow in the long term, not all analysts are ready to buy.

Some question the market potential of future products.

"I have somewhat muted feelings about the future," said Charlie Rentschler, investment analyst with Boenning & Scattergood Inc.

Others think Monsanto's stock price is too high at $68 for a price-earnings ratio of 29.35, well above Standard & Poor's 500 index P/E of 23.93.

"Why pay 30 times for a company that is growing 15 percent, especially when there's no competition to tell you it's cheap?" said Horst Hueniken, analyst with Stifel, Nicolaus & Co Inc.

Analysts are sharply divided. Ten of the 22 surveyed by Bloomberg LP rate Monsanto's stock a hold or neutral, while another two rate it a sell.