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On Monday, Goldman Sachs reaffirmed its Buy rating and $51.00 price target for FMC Corp (NYSE:FMC), following the company’s first-quarter earnings report. According to InvestingPro data, FMC appears significantly undervalued, with the stock down over 39% in the past six months. FMC Corp announced an adjusted EBITDA of $120 million, surpassing the Bloomberg consensus of $113 million. Despite this beat, the company experienced a 1% decline in volumes and a 9% year-over-year decrease in pricing, primarily due to adjustments in cost-plus diamide contracts.
The company has projected its second-quarter EBITDA to be between $175 million and $205 million, which falls short of the anticipated consensus of $207 million. However, FMC Corp has maintained its full-year EBITDA guidance of $870 million to $950 million. Goldman Sachs analysts noted that the lower second-quarter guidance and the emphasis on the second half of the year’s performance likely contributed to the negative reaction in FMC’s shares following the earnings per share announcement. InvestingPro data shows the company maintains strong shareholder returns with a 6.14% dividend yield and a 20-year track record of consistent dividend payments.
Analysts observed that FMC Corp is currently in a "show-me" mode, indicating that the expected turnaround in volumes has been delayed by one quarter more than the market had anticipated. The company had previously communicated its willingness to accept short-term volume declines to position itself for growth in the latter half of the year, which is now manifesting as anticipated.
Despite the near-term challenges, Goldman Sachs has not found additional reasons to adjust its full-year EBITDA estimates for FMC Corp. The analysts also highlighted the significant potential in FMC’s pipeline of new active ingredients, which they believe will diversify the company’s portfolio and lessen the reliance on the diamide platform.
In conclusion, Goldman Sachs views the FMC Corp turnaround story as an attractive investment opportunity, citing the current share price as a favorable entry point given the near-term volatility from the final stages of a destocking period. InvestingPro analysis reveals the company maintains a "Fair" overall financial health score, with particularly strong profitability metrics. For deeper insights into FMC’s valuation and growth potential, including 8 additional ProTips and comprehensive financial analysis, subscribers can access the full Pro Research Report.
In other recent news, FMC Corporation reported a 14% decline in Q1 2025 sales compared to the previous year, with revenue totaling $791 million. Despite this, the company’s earnings per share (EPS) were $0.18, surpassing the forecast of $0.09. The earnings beat did not prevent the stock from falling 6.31% in after-hours trading, indicating investor concerns about the company’s sales performance and regional challenges. Analysts from KeyCorp (NYSE:KEY) and BMO Capital discussed the company’s strategy, focusing on FMC’s efforts to reduce channel inventory and expand its market presence in Brazil. The company anticipates a 7% revenue growth in the second half of 2025, driven by new product volumes and market expansion. FMC’s full-year guidance suggests that sales will remain flat, with adjusted EBITDA expected to grow by 1%. The company also faces potential headwinds from tariffs, estimated to impact costs by $15-20 million, which FMC plans to offset through various measures. Despite the challenges, FMC’s management remains optimistic about achieving growth in the latter half of the year.
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