What’s Behind The 40% Fall In FMC Inventory?

FMC stock (NYSE: FMC), an agricultural science firm targeted on merchandise to enhance crop yield and high quality, has seen a big 37% fall in per week, amid a bleak outlook for 2025. It delivered blended fourth-quarter outcomes, with earnings surpassing however income falling in need of analyst expectations. The corporate posted gross sales of $1.22 billion, under the projected $1.34 billion, as decrease pricing and unfavorable international trade charges impacted income. Nonetheless, adjusted earnings per share got here in at $1.79, beating the consensus forecast of $1.60.

Now, FMC inventory is down 43% because the starting of 2024, underperforming the broader S&P500 index, up 26%. Though a lot of this decline got here final week, the stock de-stocking difficulty has weighed on the corporate’s efficiency recently. If you’re searching for an upside with a smoother experience than a person inventory, think about the High-Quality portfolio, which has outperformed the S&P, and clocked >91% returns since inception.

FMC’s revenue of $1.22 billion in This autumn was up 7% y-o-y, and up 12% on an natural foundation. It noticed a 15% soar in volumes, pushed by an elevated demand in North America, whereas its general pricing remained comfortable. segments, North America was up 23%, Latin America down 10%, Asia up 10%, EMEA up 18%, and the Plant Well being gross sales had been up 33%.

FMC noticed its adjusted EBITDA margin broaden by 550 bps to 27.7% in This autumn, in comparison with 22.2% within the prior-year quarter. Increased revenues and margin growth resulted in earnings of $1.79 per share, up 67% y-o-y. Wanting ahead, FMC expects its 2025 gross sales to be $4.25 billion and adjusted earnings of $3.48 per share, on the mid-points of the supplied vary. That is a lot decrease than the consensus estimates of $4.40 billion and $4.36, respectively.

A big hole in outlook didn’t sit properly with the buyers and the inventory dropped over 30% after the outcomes announcement. The volatility in FMC inventory isn’t one thing new. Even when we have a look at a barely longer timeframe, the adjustments in FMC inventory over the current years have been removed from constant, with annual returns being extra unstable than the S&P 500.

In distinction, the Trefis Excessive High quality (HQ) Portfolio, with a group of 30 shares, is far much less unstable. And it has comfortably outperformed the S&P 500 during the last 4-year interval. Why is that? As a gaggle, HQ Portfolio shares supplied higher returns with much less threat versus the benchmark index; much less of a roller-coaster experience, as evident in HQ Portfolio efficiency metrics.

Given the present unsure macroeconomic surroundings round fee cuts and ongoing commerce wars, might FMC face the same state of affairs because it did in 2021, 2023, and 2024 and underperform the S&P over the following 12 months — or will it see a restoration? After its current fall, FMC inventory does seem enticing from a valuation perspective. At its present ranges of $35, it’s buying and selling at simply 1.0x trailing revenues, versus the inventory’s common P/S ratio of two.2x during the last 5 years. Whereas the corporate’s dim 2025 outlook warrants a decrease valuation a number of, we imagine the present price-to-sales ratio has fallen excessively under its historic common. In our view, the present inventory pullback presents a beautiful entry level for long-term buyers looking for strong future returns.

Whereas FMC inventory now seems undervalued, try how FMC’s Friends fare on metrics that matter. You can find different invaluable comparisons for corporations throughout industries at Peer Comparisons.

[1] Returns as of two/10/2025
[2] Cumulative whole returns because the finish of 2016

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The views and opinions expressed herein are the views and opinions of the writer and don’t essentially mirror these of Nasdaq, Inc.