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On Friday, UBS analyst Joshua Spector downgraded shares of FMC Corp . (NYSE: NYSE:FMC) from Buy to Neutral, significantly reducing the price target from $66.00 to $38.00. The adjustment reflects concerns over the agricultural chemical company’s near-term prospects and potential long-term challenges. The stock, currently trading at $35.66, has fallen over 36% in the past week alone, with InvestingPro data showing it’s trading near its 52-week low of $34.00. According to InvestingPro’s Fair Value analysis, FMC appears undervalued at current levels.
Spector’s analysis points to a lack of potential for a market rebound in crop chemicals demand by 2025. Additionally, the strategic shift by FMC is perceived to introduce execution risk. This combination, according to UBS, may result in continued pressure on FMC’s stock and possibly a structural de-rating as the company faces ongoing debates regarding its diamide patents. Despite these challenges, InvestingPro data reveals the company maintains a solid 6.51% dividend yield and has maintained dividend payments for 19 consecutive years. Want deeper insights? InvestingPro offers 12 additional investment tips for FMC, available in their comprehensive Pro Research Report.
The revised outlook by UBS indicates that FMC’s 2025 guidance, which shows a third consecutive year with EBITDA under $1 billion, includes high single-digit percentage volume growth year-over-year, estimated at 5.5%. However, this is expected to be counterbalanced by low to mid single-digit percentage pricing declines, with an estimated decrease of 3.6%. UBS’s updated 2025 EBITDA forecast for FMC is $877 million, a 14% reduction from previous estimates and 7% below the consensus.
Despite acknowledging FMC’s potential to grow volumes due to new product launches, UBS cautions that there is little room for error. The firm anticipates increased risks stemming from changes in FMC’s sales strategy and the possibility of earlier and more significant pricing pressures in diamides than previously expected, leading to the decision to downgrade the stock rating and price target.
In other recent news, FMC Corp. has been in the limelight due to its Q4 earnings and revenue results, and a series of analyst downgrades. Despite exceeding Q4 earnings per share expectations, the company’s revenue fell short of estimates and the guidance for the upcoming fiscal year did not meet analyst projections. FMC Corp. reported a Q4 EPS of $1.79, surpassing the analyst estimate of $1.63, but revenue of $1.22 billion did not meet the expected $1.34 billion. The company’s full-year 2025 EPS outlook of $3.26 to $3.70 is notably below the consensus of $4.36.
Analysts from RBC Capital, Morgan Stanley (NYSE:MS), and BofA Securities have downgraded FMC Corp. due to concerns about the company’s full-year guidance, competitive pressures, and the sustainability of its dividend. RBC Capital’s Arun Viswanathan downgraded the stock from Outperform to Sector Perform, while Morgan Stanley’s Vincent Andrews maintained an Equalweight rating but lowered the price target. BofA Securities analyst Steve Byrne downgraded FMC Corp. from Neutral to Underperform.
These recent developments highlight the challenges FMC Corp. is facing, including increased competition, inventory management issues, and pricing pressures. Mizuho (NYSE:MFG) Securities maintained a Neutral rating but reduced the price target, following the company’s acknowledgment of broader challenges. The firm also revised its estimates for the company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) for the years 2025 and 2026.
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