Michael E. Cox and Mike J. Ritzenthaler of Piper Jaffray write, “After hosting investor meetings with the CEO of Ceres, we are reiterating our Overweight rating and $24 price target. While the sugarcane and sweet sorghum harvest in Brazil is just getting underway, we remain optimistic about the potential for a sharp increase in Ceres planted acreage next growing season. We look for next season to represent a key validation point for Ceres and a catalyst for both the fundamentals and the stock.
“Based on our discussions with a key customer in Brazil, Ceres sweet sorghum seed has exceeded expectations visually and outperformed competitor Monsanto in terms of biomass (height and stalk thickness). Sugar content and ethanol conversion will be tested following harvest. Next week, Ceres will be presenting the benefits of sweet sorghum to a group of 100+ sugarcane mill groups in an event held in Piracicaba, Brazil – the heart of Brazil’s sugarcane growing region. We believe this event presents a key branding and marketing opportunity for Ceres.”