Jefferies & Co. reiterates buy

Investors may be disappointed this week if Monsanto Co., the world's biggest seed maker, fails to show a clear path to greater profitability, Jefferies & Co. analyst Laurence Alexander said on June 22.

Alexander cited uncertainty over approval by the U.S. Environmental Protection Agency of SmartStax, a new corn seed more resistant to pests and weeds. He also said the glyphosate business, which includes Monsanto's Roundup product, will likely continue to be volatile, keeping Monsanto's stock in the narrow trading range in which its shares have held for much of the year, Alexander said in a note to investors.

Alexander said he expects third-quarter profit of $1.20 per share.

"Whereas investors appear to be looking for a reset of expectations to help Monsanto break out of its recent trading range, the timing of the third-quarter earnings call suggests the outcome will more likely be a muddle than a resolution," Alexander said.

On the earnings conference call scheduled for Wednesday, he said he expects "some visibility" on seed pricing next year, details on excess glyphosate inventory, the 2012 outlook for glyphosate and claims by DuPont that Monsanto's RoundupReady soybean patents are invalid. However, Alexander said he expects Monsanto will "hedge on the 2010 glyphosate outlook" and the scale of the launch of SmartStax pending the EPA's decision.

E-Trade Financial Corp. (ETFC)

Fox-Pitt Kelton upgrades to in line from underperform

Fox-Pitt Kelton analyst David Trone said on June 22 that E*Trade's capital raise -- $1 billion proposed debt swap and common stock offering announced June 19 -- will be a "sufficient cushion" to get the company through the first quarter of 2010.

"We continue to firmly believe that E-Trade will likely be bankrupt or sold by mid-year 2010, with the latter now looking more likely," Trone wrote in a note to investors. He thinks the brokerage could be sold for $3.51 a share, with the bulk of proceeds used to repay debt and $1.68 in cash left for shareholders -- a 33 percent gain from the current price.

TJX Companies Inc. (TJX)

Lazard Capital Markets raises price target

Lazard Capital Markets analyst Todd Slater said on June 22 that traffic to TJX Companies Inc. retail stores had been improving and it was in good position to benefit as consumer spending improves. Slater also raised a price target on the stock to $37 from $36. He has a buy rating on the shares.

"We see TJX as a strong offensive play into an improving consumer environment," Slater told investors in a research report. Slater also predicted that June traffic would be flat, compared with a company estimate of traffic falling 3% to 5% over last year.

"Our mall rats observed consistently better than average traffic trends at TJX, accelerating into the Father's Day weekend," the analyst wrote.

He said there was further potential the stock will be boosted by easier profit comparisons, the effect of cost cuts, fewer markdowns and market share gains from the liquidation of competitors such as Linens 'N Things and Mervyn's.

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