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Will FMC Corporation’s (NYSE:FMC) Earnings Grow Over The Next Few Years?

Simply Wall St

FMC Corporation’s (NYSE:FMC) announced its latest earnings update in December 2018, which confirmed that the business turned profitable again after experiencing losses in the previous financial year. Today I want to provide a brief commentary on how market analysts view FMC’s earnings growth outlook over the next couple of years and whether the future looks brighter. Note that I will be looking at net income excluding extraordinary items to get a better understanding of the underlying drivers of earnings.

View our latest analysis for FMC

Analysts’ expectations for the coming year seems optimistic, with earnings climbing by a robust 15%. This growth seems to continue into the following year with rates reaching double digit 36% compared to today’s earnings, and finally hitting US$968m by 2022.

NYSE:FMC Past and Future Earnings, March 1st 2019

Even though it’s informative knowing the growth each year relative to today’s level, it may be more valuable to determine the rate at which the company is growing every year, on average. The benefit of this method is that we can get a better picture of the direction of FMC’s earnings trajectory over the long run, irrespective of near term fluctuations, which may be more relevant for long term investors. To calculate this rate, I’ve inserted a line of best fit through analyst consensus of forecasted earnings. The slope of this line is the rate of earnings growth, which in this case is 11%. This means that, we can assume FMC will grow its earnings by 11% every year for the next couple of years.

Next Steps:

For FMC, I’ve compiled three key aspects you should further research:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is FMC worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether FMC is currently mispriced by the market.
  3. Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of FMC? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.