Index falls as earnings results weigh; pound above $1.33, Bodycote soars
On Thursday, Goldman Sachs began its coverage of FMC Corp (NYSE:FMC) with a positive outlook, assigning a Buy rating and setting a price target of $51.00 for the chemical company’s stock. According to InvestingPro data, analyst targets for FMC range from $36 to $95, with the stock currently trading at $39.84, suggesting potential upside based on Goldman’s target. The initiation by Goldman Sachs comes after a period of transformation for FMC Corp, which has narrowed its focus to become one of the few pure play crop protection companies.
The significant change in FMC Corp’s business model was highlighted by its acquisition in 2017 of a substantial segment of the legacy Dupont Crop Protection business. This strategic move brought the diamide insecticide platform under FMC’s wing, which has been recognized as one of the most successful crop chemical franchises. The company maintains strong shareholder returns with a notable 5.82% dividend yield and has maintained dividend payments for 20 consecutive years, as highlighted in InvestingPro’s analysis.
Despite this strategic positioning, FMC Corp’s stock has faced challenges, particularly affected by a destocking cycle in the years 2023 and 2024. More recently, the company has had to adjust its strategy for the off-patent Rynaxypyr insecticide due to unexpected acceleration in generic competition entering the market.
Goldman Sachs sees a significant opportunity for stock value growth if FMC Corp’s newly announced strategy for managing off-patent diamides is successful. Additionally, the investment firm suggests that the market may be underestimating the potential for future growth from FMC’s new product launches planned for 2026 and beyond. Goldman Sachs’ assessment indicates that current consensus estimates fall short of FMC’s own guidance targets for the year 2027, signaling room for upward revisions should the company meet or exceed its strategic goals.
In other recent news, FMC Corp reported a fourth-quarter earnings per share that surpassed consensus estimates by $0.19. However, the company’s forecast for 2025 fell short of market expectations, with anticipated earnings per share between $3.26 and $3.70, compared to the projected $4.36. Sales for 2025 are estimated to be between $4.15 and $4.35 billion, with EBITDA projected at $870 to $950 million. KeyBanc Capital Markets adjusted its price target for FMC Corp from $55.00 to $51.00, maintaining an Overweight rating, while Jefferies reduced its price target from $61.00 to $49.00, keeping a Buy rating. Redburn-Atlantic downgraded the stock from Buy to Neutral, citing concerns over expiring patents for key ingredients and increased competition from generics. Citi maintained a Neutral rating and a $38.00 price target, as FMC Corp discussed strategic priorities, including inventory management and the introduction of innovative products. Additionally, FMC Corp extended its $2.0 billion revolving credit facility to June 2028, enhancing its financial stability and flexibility. These developments highlight the challenges and strategic initiatives FMC Corp is navigating in the current fiscal landscape.
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