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Here's Why You Should Retain FMC Corp (FMC) in Your Portfolio

FMC Corporation FMC is benefiting from its efforts to expand product portfolio, boost market position and its cost and pricing actions amid headwinds including soft demand conditions.

The company’s shares are down 49.5% in a year compared with a 4.3% decline of its industry.


Zacks Investment Research
Zacks Investment Research

Image Source: Zacks Investment Research

Let’s find out why this Zacks Rank #3 (Hold) stock is worth retaining at the moment.

New Products, Pricing Actions Aid FMC

FMC remains focused on strengthening its product portfolio. It is investing in technologies and products as well as new launches to enhance value to the farmers. New products launched in Europe, North America and Asia are gaining significant traction. Product introductions are expected to support the company’s results. Revenues from products introduced in the past five years rose 4% year over year in the last reported quarter.

The acquisition of BioPhero ApS, a Denmark-based pheromone research and production company, also adds biologically produced state-of-the-art pheromone insect control technology to the company’s product portfolio and R&D pipeline, highlighting FMC's role as a leader in delivering innovative and sustainable crop protection solutions.

The company is actively taking price increase measures to mitigate the impact of cost inflation. Price hikes in North America, EMEA and Asia contributed to its top line in the third quarter of 2023. The company is also expected to benefit from improved input costs, favorable product mix and its cost-control actions.

Demand Weakness Ails

The company faces headwinds from inventory de-stocking, especially in Latin America. The aggressive de-stocking by growers in the distribution channel is hurting its volumes as witnessed in the third quarter. The de-stocking is due to lower prices of fertilizers and certain non-selective herbicides as well as higher interest rates, which have increased the carrying cost of inventory. Continued inventory management is expected to weigh on the company’s volumes in the fourth quarter.

FMC also faces headwinds stemming from higher interest expenses. Higher U.S. interest rates are largely contributing to the spike in interest expenses. The company now expects interest expenses for full-year 2023 in the band of $240-$245 million, up from $220-$230 million expected earlier. Higher interest expenses are expected to weigh on margins.

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

Better-ranked stocks worth a look in the basic materials space include Cameco Corporation CCJ, Axalta Coating Systems Ltd. AXTA and Quaker Chemical Corporation KWR.

Cameco has a projected earnings growth rate of 156% for the current year. The Zacks Consensus Estimate for CCJ’s current-year earnings has been revised upward by 20.8% over the past 60 days.  The stock is up around 82% in a year. CCJ currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 60 days, the consensus estimate for Axalta Coating Systems’ current-year earnings has been revised upward by 8.2%. AXTA, carrying a Zacks Rank #2 (Buy), beat the Zacks Consensus Estimate in three of the last four quarters while missing in one quarter, with the average earnings surprise being 6.7%. The company’s shares have gained around 29% in the past year.

Quaker Chemical, carrying a Zacks Rank #2, has a projected earnings growth rate of 28.3% for the current year. KWR has a trailing four-quarter earnings surprise of roughly 16.7%, on average. KWR shares have gained 20% in a year.

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FMC Corporation (FMC) : Free Stock Analysis Report

Quaker Houghton (KWR) : Free Stock Analysis Report

Axalta Coating Systems Ltd. (AXTA) : Free Stock Analysis Report

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