Monsanto Company (MON): Is It A Good Long Term Opportunity?

Monsanto Company (NYSE:MON)’s sound earnings growth per share is expected to be a double-digit 26.27% over the next three years. Presently, with an EPS of $4.64, we can expect next year’s upcoming EPS of around $5.97. A positive earnings growth may please investors on the surface, but it’s important to compare this expectation to MON’s track record. This will give investors context as to whether the growth prospect is justified and bolstered by past trends. To determine whether this growth rate expectation is justified, we should take a look at how the company has been performing in the past. View our latest analysis for Monsanto

How is MON going to perform in the future?

NYSE:MON Past Future Earnings Aug 16th 17
NYSE:MON Past Future Earnings Aug 16th 17
Analysts covering MON are expecting a 26.3% increase in earnings in the three years’ time. This would see the EPS rise to $5.97, which would no doubt please investors who are used to an average of $4.18 over the past few years. During the same time revenue is predicted to grow from $14.52 Billion to $15.75 Billion in 2020 and profits (net income) are predicted to escalate from $2.05 Billion to $2.85 Billion in 2020, roughly growing 1.4x. Margins are on track to be a respectable 18.12% in the future.

Basis for the growth

The past can be an insightful indicator for future performance for a stock. We can determine whether this level of expected growth is highly excessive or whether the company has consistently exhibited strength. MON’s earnings growth in the last five years was a unexciting 5.23%, indicating a relatively more optimistic future painted for the company in the future. This belief may be supported by turnaround initiatives implemented in the past or previous investments coming to fruition.

Conclusion

On the whole, MON looks like it is well-placed to reap strong growth in the upcoming years, supported by analysts’ double-digit growth projections. However, in order to determine whether this bullish sentiment is yet to be accounted for by the market, we also need to see if it is undervalued. As Warren Buffett’s right-hand man Charlie Munger said, “No matter how wonderful a business is, it’s not worth an infinite price“. Is MON an undervalued gem? Let’s find out in this free analysis report. If you are not interested in MON anymore, you can use our free platform to see my list of over 150 other stocks with a high growth potential.