Syngenta's spell in the stockmarket limelight may have come to an end, Credit Suisse analysts have said, recommending investors wanting exposure to agriculture to switch to BASF or Yara International.

The investment bank cut to "neutral", from "outperform", its rating on Syngenta shares, which jumped of 23% in the last three months of 2009.

The surge, which represented an outperformance of 19% compared with other Swiss shares, reflected a technical switch by investors to "quality defensive stocks" rather than improved hopes for the seed and sprays group's profitability.

"Consensus earnings [forecasts] have barely moved," Credit Suisse said, adding that with the stock trading at multiples above historic average of 11.6 times forward earnings, "now is the time to take profit".

Market talk 

While Syngenta was poised to raise revenues by 11% in 2010, nearly half of this forecast improvement was down to currency movements.

Syngenta's seeds division, while capable of expanding its margin for underlying earnings from 5% in 2008 to 15% in 2011, was suffering from delays in product development and to a rumoured loss of share in the important US corn market.

"There has been some talk amongst growers and industry commentators… of Syngenta's germplasm being weaker or lower yielding than peers'," Credit Suisse said.

"Finding empirical evidence for this is hard… so we cannot prove or disprove this claim. However, even the fact that it is talked about in the market may be a negative for the firm."

'Interesting potential' 

Yara stock looked a better bet, boosted by the reviving demand for nitrogen fertilizers which was boosting the premium of some of its ammonium nitrate products over urea.

Shares in BASF also hold potential, with the German chemicals conglomerate likely to prove "one of the few companies to increase agriculture earnings in 2009", and whose genetically modified seeds business holds "interesting upside potential".

Syngenta shares closed down 0.5% at SFr289.20.

BASF shares ended 3.2% higher at E44.85 in Frankfurt, with Yara stock finishing up 3.2% at NKr272.20 in Oslo.