SYT - Syngenta AG - Within the past 30 days, two of four covering analysts have increased their current-year estimates

Syngenta AG (SYT) is another company that is cashing in on the incredible boom in the Agriculture markets. The company reported awesome six-month and full-year results on Feb 7, with full-year profits growing by almost 100% to $1.11 billion. The company also boosted its guidance in anticipation of continued strength in the ag markets.

Full Analysis

Syngenta AG, an agribusiness company, operates in crop protection and seeds businesses. It operates in three segments: Crop Protection, Seeds, and Plant Science. The company markets these products worldwide under NK, Golden Harvest, GARST, Hillesh, S&G, and Rogers brand names. Syngenta has operations in Europe, Africa, the Middle East, Latin America, the Asia Pacific, and North America. The company was founded in 1999 and is headquartered in Basel, Switzerland.

Syngenta reported blazing full-year results on Feb 7, fueled by soaring commodity prices and increased demand. Full-year profits were up almost 100% to $1.11 billion, compared to $634 million from last year. Sales increased 15% to $9.24 billion. The company also announced a dividend of $4.37, and said that it would continue its share buyback program.

Crop protection, which accounts for 75% of Syngenta's revenue, increased by 14% to $7.3 billion in the last year, up from $6.4 billion in 2006. The crop protection business posted its strongest growth in Latin America with a 37% increase. Europe, Africa and the Middle East also reported double-digit growth.

Chief Executive Mike Mack said 2007 was a turning point for the Syngenta, as growers across the world attempted to maximize their yields in light of the supply shortage in the Ag markets. Mack added that continued high demand for agricultural commodities would enable Syngenta to target double digit growth in earnings per share through 2010.

Estimates for the company have been rising, as the analyst community digests the robust results and bullish industry outlook. Within the past 30 days, two of four covering analysts have increased their current-year estimates, driving the consensus estimate higher by 53 cents to its current reading of $3.25 per share.

Syngenta shares have been engaged in a very smooth trend higher for the last two years, but recently, the upward trajectory increased in velocity. After bouncing from a key level of support on Jan 22, shares of SYT have proceeded to surge higher, trading as high as $56, representing a very nice short-term return of almost 25%.

Currently, shares are once again pressuring a key area that they have not been able to breach just above $55. With the short-term trend recently becoming much more aggressive, look for prices to break through and push higher. After $55, the next stop is the actual 52-week high, which is just above $57. It should only be a matter of time before this mark is broken, because the agriculture markets that are fueling fertilizer producers profits are showing no sign of slowing down any time soon.

Content Courtesy: Zacks Investment Research

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