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On Wednesday, BofA Securities issued a downgrade for FMC Corp (NYSE:FMC) shares, moving its rating from Neutral to Underperform. Alongside the downgrade, the firm also reduced the price target for FMC stock to $48 from the previous $61. Currently trading at $34.99, the stock has declined about 7% over the past year. The decision followed a review of the company’s recent earnings release, which revealed several concerns that BofA believes increase the risk profile for FMC. InvestingPro data shows that 7 analysts have recently revised their earnings expectations downward for the upcoming period.
The earnings release prompted BofA Securities to reassess the company’s prospects, as it highlighted not only broader challenges but also specific issues within the company. According to BofA, these challenges include a weaker-than-expected outlook for the first quarter, raising doubts about the company’s ability to meet its full-year guidance, which relies on a significant uptick in volume growth starting in the second quarter. Despite these concerns, InvestingPro analysis indicates the company maintains a "GOOD" overall financial health score, with particularly strong marks in profitability metrics.
Furthermore, BofA pointed out that FMC faces increased challenges from generic competition in diamides, a key product category. This competition is more intense than previously anticipated and is likely to impact the company’s performance.
The firm also noted that FMC’s outlook for 2025 is less promising than expected, with minimal EBITDA growth projected off what BofA describes as a very easy comparison. This subdued outlook is cause for concern, especially when considering the company’s past performance.
Lastly, BofA Securities expressed renewed concerns regarding FMC’s financial leverage and the sustainability of its dividend. These factors contributed to the firm’s decision to lower the price objective to $48, which is based on 9.5 times BofA’s estimated 2025 EBITDA for FMC. This adjustment reflects the increased risks and challenges that the company is expected to face.
In other recent news, FMC Corporation has been navigating through some significant challenges, as noted by multiple analysts. Mizuho (NYSE:MFG) Securities maintained a Neutral rating on the company but lowered the price target to $51, down from $55. This follows FMC’s acknowledgment of broader operational issues, with the CEO highlighting the complexity of establishing proper distribution channels, particularly in Latin America. Mizuho also revised its EBITDA estimates for FMC for 2025 and 2026, anticipating a decrease of approximately 12% from previous estimates.
Simultaneously, RBC Capital downgraded FMC from Outperform to Sector Perform, reducing the price target to $47.00 from $78.00. This decision came following FMC’s Q4 earnings report, which indicated volume headwinds due to excess inventory and cautious buying from U.S. farmers. RBC Capital also revised its EBITDA estimates for FMC for Q1 and the full year of 2025 downward.
Morgan Stanley (NYSE:MS)’s Vincent Andrews also adjusted the price target for FMC, reducing it to $46.00 from $70.00, while maintaining an Equalweight rating. Andrews noted several conditions that could rekindle investor interest in FMC, including the company’s ability to meet its EBITDA guidance for 2025.
Lastly, FMC reported Q4 earnings that surpassed analyst estimates, but revenue fell short of expectations. The company also provided a disappointing guidance for 2025, with both earnings per share and revenue estimates being below Wall Street forecasts. Despite these challenges, FMC highlighted strong cash generation in 2024. These are the recent developments regarding FMC Corporation.
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