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FMC Corp (FMC) Up 44% in 6 Months: What's Behind the Rally?

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·4 min read
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Shares of FMC Corporation FMC have rallied 43.9% in the past six months, outperforming the industry’s growth of 6.7% and the S&P 500’s roughly 6.9% rise over the same period.

Zacks Investment Research
Zacks Investment Research


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What’s Aiding the Stock?

FMC Corp, carrying a Zacks Rank #3 (Hold), is benefiting from healthy demand for its industry-leading products, besides market share gains and new product launches. Better-than-expected earnings performance in the fourth quarter and upbeat guidance have also contributed to the run-up in FMC’s shares.

FMC Corp’s adjusted earnings per share of $2.16 in the fourth quarter topped the Zacks Consensus Estimate of $2.02. Revenues rose around 23% year over year to $1,413.6 million in the quarter and surpassed the Zacks Consensus Estimate of $1,367.6 million. Revenues were driven by 21% rise in volumes and 4% contribution from price. The company benefited from a healthy demand environment and price increases.

For first-quarter 2022, the company expects revenues in the band of $1.22-$1.34 billion, reflecting an increase of 7% at the midpoint compared with the prior-year quarter’s level. Adjusted earnings are forecast to be $1.50-$1.90 per share, calling for an increase of 11% at the midpoint from the prior-year quarter’s level. It also expects adjusted EBITDA in the range of $300-$350 million for the quarter.

For 2022, FMC expects revenues between $5.25 billion and $5.55 billion, indicating a rise of 7% at the midpoint from 2021 levels. Sales are expected to be driven by higher volumes and prices in all regions.

FMC Corp is seeing demand strength for its products (diamides and insecticides) in North America on high crop commodity prices. The company also saw higher demand for diamides in India and overall strength in its insecticide portfolio in Asia in the most recent quarter. Demand for the company’s insecticide products in corn and soybean applications is also strong in Brazil, aided by higher planted areas and strong commodity prices. FMC Corp sees pricing to be up mid-single digits in first-quarter 2022, factoring in strong fundamentals. The company expects strong volume growth in 2022 across regions and portfolios.

It is also gaining from continued market share gains and new product introductions (across corn, soybean and cotton markets) in North and Latin America. The company remains focused on investing in technologies and products in its agriculture business and launching new products to enhance value to the farmers. It expects new products launched in the past five years to contribute $600 million to sales in 2022.

FMC Corporation Price and Consensus

FMC Corporation Price and Consensus
FMC Corporation Price and Consensus

FMC Corporation price-consensus-chart | FMC Corporation Quote

Stocks to Consider

Some better-ranked stocks in the basic materials space are The Mosaic Company MOS, AdvanSix Inc. ASIX and Allegheny Technologies Incorporated ATI.

Mosaic has a projected earnings growth rate of 125% for the current year. The Zacks Consensus Estimate for MOS' current-year earnings has been revised 33.3% upward in the past 60 days.

Mosaic’s earnings beat the Zacks Consensus Estimate in three of the last four quarters while missing once. It delivered a trailing four-quarter earnings surprise of roughly 3.7%, on average. MOS has rallied around 109.6% in a year and currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

AdvanSix has a projected earnings growth rate of 64.8% for the current year. The Zacks Consensus Estimate for ASIX’s current-year earnings has been revised 58% upward in the past 60 days.

AdvanSix’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, the average surprise being 23.6%. ASIX has surged 83.9% in a year. The company sports a Zacks Rank #1.

Allegheny, currently carrying a Zacks Rank #2 (Buy), has an expected earnings growth rate of 661.5% for the current year. The Zacks Consensus Estimate for ATI's earnings for the current year has been revised 45.6% upward in the past 60 days.

Allegheny’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 127.2%. ATI has rallied around 25.2% over a year.


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