Zacks Investment Research downgraded shares of Syngenta AG (SYT) from NEUTRAL to UNDERPERFORM on October 24, 2013, with a target price of $74.00.
Syngenta recorded a hike in sales across all regions in the third quarter of 2013. However, sales were negatively impacted by foreign currency transactions. While sales increased 11% year over year on a constant currency basis, foreign exchanges pulled it down by 3%. The company expects foreign exchange benefits to reduce in the coming quarters, impacting earnings. Additionally, international operations of the company expose it to various geo-political risks. Syngenta expects its corn production in 2013 to be above expectations, compelling the company to write-down part of the production in excess of estimated sales. Product launches by the company, in order to gain market share, raise the risk of legal as well as compliance costs. Moreover, many resources that are spent on new products and technological developments may sometimes prove futile. Last year's drought affected the company adversely, leading to a rise in costs. Based on these factors, we downgrade our recommendation on the company to Underperform from Neutral.
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