Oil prices were the weekend’s big news as Saudi Arabia and Russia made a deal to stabilize the market, helping the commodity surge as much as 5%. It was also a good day for the yen, which gained value while the U.S. dollar fell slightly.
Here’s what investors and traders should be looking at:
Monsanto Company (MON)
Bayer AG (ADR) (OTCMKTS:BAYRY) is stepping up its efforts yet again in its pursuit of Monsanto.
The German pharmaceutical company is offering $127.50 per share of MON stock, up from its previous offer of $125 a share. This would amount to about $65 billion, including debt.
Monsanto said it is exploring the possibility of this deal coming to fruition, with the board convening to determine whether or not such a move would be in the shareholders’ best interest.
The agricultural products manufacturer has been hit hard by the ongoing decline of farmers’ wages, which has caused these workers to be more frugal with their spending. Monsanto has responded by cutting costs, laying off 16% of its global workforce as part of its restructuring process.
MON stock is up about 1% in Tuesday’s premarket trade. If that holds, its year-to-date gains would stand at nearly 10%.
Biogen Inc (BIIB)
Biogen shares are off this morning, but only a bit, amid a downgrade from Jefferies … but also a price-target hike.
Jefferies downgraded BIIB shares to “Hold” from “Buy,” believing that the company’s valuation has normalized. Specifically:
“We believe current valuation, after having appreciated 40% in the past ~2mo, now better reflects the favorable fundamentals — potential medium-term cash flows from their stabilizing MS franchise and improving operating leverage, nucinerin’s recent success, last week’s additional supportive aducanumab titration data in Alzheimer’s, and the potential for favorable near-term IP developments — balanced by long-term headwinds of competition, slowing growth, and need for diversification.”
That said, based on the firm’s discounted cash flow calculations, Jefferies did raise its price target on Biogen stock to $323, reflecting just 3% upside from here.
BIIB shares were up marginally on the news.
Navistar International Corp (NAV)
VLKAY has disclosed plans to acquire a 17% stake of the military truck manufacturer, amounting to a total of about $200 million.
Volkswagen’s position in the company would help it expand is presence in the military. However, Navistar has yet to confirm or deny these rumors. The automaker would get two seats on the board of directors, according to the report.
Carl Icahn is one of Navistar’s largest shareholders, owning about 20% of the company.
NAV shares are on pace to jump 26% at Tuesday’s open.
As of this writing, Karl Utermohlen did not hold a position in any of the aforementioned securities.
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