Zacks Analyst Interview Highlights: Syngenta, Novartis, AstraZeneca and Monsanto

Business Wire, June 18, 2008

CHICAGO -- Zacks.com releases the latest Analyst Interview. Today's interview is with senior analyst Santiago Burgaleta, who discusses Syngenta (NYSE: SYT), Novartis AG (NYSE: NVS), AstraZeneca PLC (NYSE: AZN) and Monsanto (NYSE: MON).

A synopsis of today's Analyst Interview is presented below. The full article can be read at http://at.zacks.com/?id=2678.

In the U.S. agriculture stocks have been gaining due in part to higher pricing. Do you find the same thing with a European agriculture company like Syngenta?

Sure. The long-term positives of Syngenta's (NYSE: SYT) business model are backed by short-term catalysts. We remain buyers of Syngenta AG, and have increased our target price to $65.00. The depth of its product mix, robust business model, and highly regarded management team support our positive view on the stock.

We believe Syngenta is one of the safest plays on the sector, which should be reflected in higher valuations, and we remain confident in management's execution capabilities in cost cutting. Potential for rising pay-outs should not be overlooked by investors.

The company was a result of the de-merger of Novartis agribusiness from Novartis AG (NYSE: NVS) and of Zeneca agrochemicals business from AstraZeneca PLC (NYSE: AZN). The businesses combined in November 2000 to form Syngenta. The company's combined major research and manufacturing operations are located in over 20 countries around the world.

How are you currently valuing Syngenta shares?

Syngenta is trading at 23.7x our 2008 EPS estimate. We think its discount to Monsanto (NYSE: MON) is still unwarranted. We are aware of Monsanto's efforts and progress in Genetic Modified seeds versus Syngenta's, which have lagged, but a 70% premium valuation is still difficult to justify.

We believe Syngenta should trade in the 27.0-30x range, which yields a target price of $65. The discount to its peers has become a premium as the growth prospects for the company and earnings stability drive valuations higher, but still trades at discount to its most direct peer, Monsanto. The stock may be more volatile going forward as the premium valuation is digested by investors, but we believe there is room for a move higher.

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