Piper Jaffray Raises Monsanto Target To $127 On Buyout Talks

Piper Jaffray's Brett Wong maintains Monsanto Company (NYSE: MON)'s Overweight rating, while increasing the price target from $95.00 to $127.00. The price objective increase came during ongoing talks with Bayer AG (ADR) (OTC: BAYRY) to acquire Monsanto.

"We continue to believe that the potential opportunity to be acquired by Bayer is compelling, creating an entity that has all the key longer-term growth drivers," said Wong.

Combination talks came during an increasingly competitive environment, applying pressures to Monsanto's core business according to the analyst. "A Bayer/Monsanto combination helps to ensure the new company will remain a leader among a changing ag backdrop with a more formidable competitor in Dow/DD and likely market disruption from the potential Syngenta/ChemChina combination," Wong added.

Related Link: Bayer On Monsanto Bid: Push Toward Digital Farming

The analyst said an offer would be in the low $140s per share and placed the target below $140 due to uncertainty on the deal.

Wong was encouraged both companies would remain open to conversations in the future. The Jaffray analyst concluded, "Bayer will up the offer as long as the two companies are in discussions and Bayer is able to do further due diligence into the value that Monsanto provides."

At the time of writing, Monsanto traded at $108.12, down 0.99 percent on the day.