The Rising Influence of Rising Affluence

[DewDiligence]

MON flattish despite weak FY4Q16* non-GAAP EPS guidance of $5.10-5.60, a YoY decline of 2-11%. Currency—especially the decline of Brazil’s Real vs the US Dollar—will cost MON $0.30-0.35 of EPS in FY2016.

Evidently, the large sell-off of MON’s stock in the past few months has fully discounted the weak outlook for FY2016.

Moreover, MON is maintaining its long-term forecast that FY2019 non-GAAP EPS will be at least double the $5.23 recorded in FY2014. Meeting this goal will require a non-GAAP EPS CAGR of >20% from FY2016 through FY2019 (see slide #7 at the link below), which will be tough to accomplish and will require, at a minimum, aggressive share buybacks.

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FY4Q15 PR:
http://finance.yahoo.com/news/global-portfolio-leading-innovation-financial-120000585.html

FY4Q15 CC slides:
http://www.monsanto.com/investors/Documents/2015/2015.10.06_MON_Q4F15_Earnings.pdf

*MON’s fiscal year ends on August 31.