Valued at a market cap of $6.8 billion, FMC Corporation (FMC) is an agricultural sciences company that offers innovative solutions to farmers, including crop protection, plant health, and professional pest and turf management products. The Philadelphia, Pennsylvania-based company also offers pest control services for non-agricultural markets.
Shares of this chemical company have significantly underperformed the broader market over the past 52 weeks. FMC has marginally declined over this time frame, while the broader S&P 500 Index ($SPX) has rallied 30.4%. In 2024, shares of FMC are down 13.7%, compared to SPX’s 23.1% gain on a YTD basis.
Zooming in further, FMC’s underperformance becomes more evident when compared to the Materials Select Sector SPDR Fund’s (XLB) 14.3% gain over the past 52 weeks and 6.7% return on a YTD basis.
Headwinds, including pricing pressure, particularly in Brazil and Argentina, elevated channel inventory, and declining volume and sales in the Asian markets, have led to FMC’s underperformance over the past year.
However, on the flip side, shares of FMC surged 10.7% following its better-than-expected Q3 earnings release on Oct. 29. The company reported an adjusted EPS of $0.69, which surpassed the Wall Street estimates of $0.49 and climbed 57% from a year ago. Its revenue of $1.07 billion also outpaced the consensus estimates of $1.03 billion and increased 9% on a yearly basis.
The strong performance can be primarily attributed to a significant growth in sales from North America, fueled by strong volume growth and increased orders from diamide partners. The company’s effective and accelerating cost-saving initiatives might have further bolstered investor confidence.
For the current fiscal year, ending in December, analysts expect FMC’s EPS to decline 11.4% year over year to $1.67.The company’s earnings surprise history is mixed. It beat the consensus estimates in three of the last four quarters while missing on one other occasion.
Among the 17 analysts covering the stock, the consensus rating is a “Moderate Buy,” which is based on six “Strong Buy,” one “Moderate Buy,” nine “Hold,” and one “Moderate Sell” rating.
On Nov. 1, RBC Capital analyst Arun Viswanathan maintained a “Buy” rating on FMC and raised the price target to $81, which indicates a 48.9% upside from the current levels.
The mean price target of $71.80 represents a 32% upside from FMC’s current price levels. The Street-high price target of $90 suggests an upside potential of 65.5%.
