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On Wednesday, Morgan Stanley (NYSE:MS)’s Vincent Andrews adjusted the price target for FMC Corp (NYSE:FMC) shares, reducing it significantly from $70.00 to $46.00, while maintaining an Equalweight rating on the stock. The adjustment follows a strategy reset by FMC Corp and precedes an anticipated share price reset. Currently trading at $54.04, InvestingPro data shows FMC is slightly undervalued based on its Fair Value analysis. Notably, 7 analysts have recently revised their earnings expectations downward for the upcoming period.
Andrews noted that the investment firm’s stance remains unchanged at Equalweight after today’s strategic update. The analyst pointed out several conditions that could potentially rekindle investor interest in FMC Corp’s shares. These include the company’s ability to meet its EBITDA guidance for 2025, which is projected to be between $870 million and $950 million. This target represents a significant increase from the current trailing twelve-month EBITDA of $703.3 million. For the first quarter of 2025, the company has guided EBITDA to be in the range of $105 million to $125 million, indicating that a significant improvement is needed throughout the remainder of the year to achieve the full-year guidance. InvestingPro subscribers can access detailed financial health metrics and additional insights through comprehensive Pro Research Reports.
Another concern highlighted by Andrews is the issue of FMC’s elevated channel inventory. During a call on Tuesday, the company acknowledged that it still has FMC-specific elevated inventory levels in some countries. The final point of concern for investors, as per Andrews, is the need for more clarity regarding the competition FMC faces from generics of its product Rynaxypyr, including details about the size, scale, scope, and timing of this competition.
The analyst also mentioned that investors are likely to remain cautious and apply a discount to the company’s forecasts due to these unresolved issues and concerns about debt leverage. However, it was noted that, as per an 8K filing on Tuesday, FMC Corp has renegotiated debt covenants, which now allow leverage to be as high as 5 times at December 31, 2025. This renegotiation provides some flexibility in terms of the company’s financial obligations in the coming years. Despite these challenges, InvestingPro data reveals FMC maintains a solid current ratio of 1.48 and has consistently paid dividends for 19 consecutive years, currently offering a 4.29% yield.
In other recent news, FMC Corporation reported fourth quarter earnings that exceeded analyst estimates, although the company’s revenue fell short of expectations. Additionally, FMC provided a less than promising outlook for 2025, with revenue and earnings per share estimates falling below Wall Street’s forecasts. Despite these challenges, FMC highlighted its strong cash generation in 2024, with cash flow from operations improving by over $1 billion to $737 million and free cash flow reaching $614 million.
FMC’s adjusted earnings for Q4 were reported at $1.79 per share, surpassing the consensus estimate of $1.63. However, revenue of $1.22 billion missed analyst projections of $1.34 billion. The company’s outlook for 2025 includes full-year adjusted earnings per share of $3.26 to $3.70 and revenue guidance of $4.15 billion to $4.35 billion, both of which are lower than analyst expectations.
These are among the recent developments for FMC Corporation. The company’s Q1 2025 revenue projection stands at $750 million to $800 million, indicating a 16% YoY decline at the midpoint. This is attributed to lower customer inventory levels and cautious purchasing by retailers and growers due to lower commodity prices.
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