FMC Corp May See Volume Contraction, Analyst Warns Of Flattish Underlying Demand, Downgrades Stock
Portfolio Pulse from Nabaparna Bhattacharya
BofA Securities analyst Steve Byrne downgraded FMC Corporation (NYSE:FMC) from Neutral to Underperform and lowered the price target from $60 to $57. Byrne predicts a 20% volume contraction for FMC in 2023, which would more than offset the 18% volume gain over the past two years. The contraction is based on the assumption that global inventory levels of crop chemicals will normalize, indicating flat underlying demand. Byrne also expressed concerns about the crop chemical industry's pricing discipline and the challenges in valuing FMC's product pipeline, which includes synthetic products, biologicals, and pheromones. Additionally, Byrne cut the 2024 and 2025 EPS and revenue estimates for FMC. Following the downgrade, FMC shares closed 2.01% lower at $57.04.
January 16, 2024 | 9:12 pm
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FMC Corporation was downgraded by BofA Securities from Neutral to Underperform with a price target reduction from $60 to $57. The analyst predicts significant volume contraction and has concerns about industry pricing discipline, which could impact FMC's financial performance.
The downgrade by a major analyst, along with a reduced price target and lowered EPS and revenue estimates, is likely to negatively influence investor sentiment and could lead to a short-term decline in FMC's stock price.
CONFIDENCE 85
IMPORTANCE 90
RELEVANCE 100