Perfect Chemistry

Deutsche Bank analyst John Moten sees improvement ahead for the chemical industry

a rough year for farmers, Monsanto (NYSE: MON) and Potash (NYSE: POT) should nonetheless benefit in the near future. Moten sees indications that corn and soybean prices will rise over the next year, prompting farmers to spend more on the fertilizers, herbicides, and seeds these companies make.

John Moten’s Private Screening Picks

Company
Exchange: Symbol
Price* 12- to 18-Month
Price Target
P/E on Projected
2002 Earnings
Est. 5-Yr.
Annual EPS
Growth Rate
Why Stock Will Outperform
DuPont
NYSE: DD
$40.08 $57 20.9 11 With its core businesses bouncing back, look for earnings per share of $1.85 in 2002, up from 2001′s $1.19.
PPG Industries
NYSE: PPG
51.47 61 16.1 9.2 PPG’s coating and glass products divisions are getting a nice boost from increases in U.S. auto production.
Monsanto
NYSE: MON
16.17 28 12.6 9.7 Trading close to 13 times 2003 projected earnings, Monsanto is one of the cheapest stocks in the group.
Potash
NYSE: POT
62.42 80 50.5 16 As prices for corn and soybeans rise, prices for the company’s fertilizers are bound to improve.
*AS OF SEPT. 13, 2002SOURCES: JOHN MOTEN, DEUTSCHE BANK SECURITIES;
MORNINGSTAR INC.;
YAHOO! FINANCE;
ZACKS INVESTMENT RESEARCH
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