Shares of FMC Corporation FMC have popped 30.8% over the past year. The company has also outperformed its industry’s decline of 8.2% over the same time frame.
FMC has a market cap of roughly $13.5 billion. Average volume of shares traded in the last three months was around 1,078.8K. The company has an expected long-term earnings per share growth rate of 10.7%, above the industry average of 7.4%.
Let’s take a look into the factors that are driving this Zacks Rank #3 (Hold) stock.
What’s Working in FMC’s Favor?
Forecast-topping earnings performance and upbeat outlook have contributed to the gains in the company’s shares. FMC has an impressive earnings surprise history. It beat the Zacks Consensus Estimate for earnings in each of the trailing four quarters, at 9% on average.
The company’s adjusted earnings per share of $1.84 for the first quarter of 2020 topped the Zacks Consensus Estimate of $1.81. FMC, on its first-quarter earnings call, said that it sees revenues to be between $4.65 billion and $4.85 billion for 2020, indicating a rise of 3% at the midpoint versus 2019. It also expects adjusted earnings per share in the range of $6.05-$6.70. The guidance reflects an increase of 5% at the midpoint compared with 2019.
Moreover, FMC envisions adjusted EBITDA of $1.23-$1.34 billion for 2020, indicating 5% growth at the midpoint versus 2019.
FMC is benefiting from higher demand for its industry-leading products, its portfolio strength and new product launches. The company is seeing healthy demand from cotton and sugarcane growers in Brazil as well as solid demand for insecticides in Argentina. Strong demand for herbicides and insecticides is also driving the company’s agriculture business in North America. Demand for fungicides also remain strong in EMEA (Europe, Middle East and Africa).
Moreover, FMC remains focused on strengthening its product portfolio. It is investing in technologies and products as well as new launches to enhance value to farmers. The company anticipates new products to contribute 1.5% of revenue growth in 2020 with the biggest contribution expected from EMEA. New product launches are also expected to contribute to strong volume growth in the second quarter of 2020.
FMC also remains committed to return value to its shareholders leveraging healthy cash flows. The company, in late 2019, hiked its quarterly dividend by 10% to 44 cents per share. FMC expects to generate free cash flow of $425-$525 million in 2020 and maintain its dividend payout.
FMC Corporation Price and Consensus
FMC Corporation price-consensus-chart | FMC Corporation Quote
Stocks to Consider
Better-ranked stocks worth considering in the basic materials space are Agnico Eagle Mines Limited AEM, Barrick Gold Corporation GOLD and Franco-Nevada Corporation FNV.
Agnico Eagle has a projected earnings growth rate of 74.2% for the current year. The company’s shares have gained roughly 26% in a year. It currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Barrick Gold has a projected earnings growth rate of 64.7% for the current year. The company’s shares have shot up around 75% in a year. It currently has a Zacks Rank #2 (Buy).
Franco-Nevada has a projected earnings growth rate of 19.2% for the current year. The company’s shares have surged around 67% in a year. It currently has a Zacks Rank #2.
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