The firm lifted its rating on MON from Neutral to Buy and set a $130 price target, suggesting a 22% upside from the stock’s Friday closing price.
Monness Crespi & Hardt said its confidence is growing that Germany-based Bayer AG will get a deal done to buy Monsanto soon, at a much higher price point.
MON recently opened its books up to Bayer, which likely means a larger bid is on the way. Bayer had previously made a $122 per-share offer, which equates to about $62 billion in cash.
The firm also noted that it’s probably in both companies’ self-interest to complete a deal now, and multiple reports suggest progress from both sides. Accordingly, the analyst sees a deal around the $130 per share level, hence the price target set at that level.
If completed, the takeover would be the largest deal ever made by a German company.
Monsanto shares fell $0.50 (-0.47%) to $106.43 in Monday afternoon trading. MON has risen 8.18% since the start of 2016, which is roughly in-line with the benchmark S&P 500 index.