22 March 2012 11:10 [Source: ICIS news]
LONDON (ICIS)--Goldman Sachs has upgraded Swiss agribusiness firm Syngenta to a ‘buy’ rating from ‘underperform’ due to increasing crop prices, the banking and securities firm said on Thursday.
Goldman Sachs said Syngenta has underperformed in the sector by around 10% over the past six months but a rise in commodity prices will improve the company's 2012 performance.
“We now view the 36% upside implied by our 12-month price target as an opportunity to buy what we consider one of the highest quality names in the sector,” it said.
“We note the increasing focus on commodity prices, due to the ramp-up in the oil price and ongoing high crop prices, which should bode well for a strong performance from Syngenta in 2012,” Goldman Sachs said.
“We continue to view Syngenta as one of the best positioned companies to benefit from megatrends in the longer term,” it said.
Goldman Sachs said it expects Syngenta’s new integrated crop protection/seeds strategy to drive its first quarter returns higher.
“Near term, we expect its earnings to benefit from higher crop prices, as these will incentivise farmers to maximise yields,” it added.
Goldman Sachs also raised Syngenta’s 12-month share price target to Swiss francs (Swfr) 405 ($445, €335) from Swfr371.
Earlier on Thursday, Syngenta successfully issued $750m worth of long-term bonds as part of its regular funding requirements.
($1 = Swfr0.91, €1 = Swfr1.21)
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