Market Overview

Loop Capital: 'We'd Be Buyers' Of Recent Pullback In FMC Corp

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Earnings Outlook For FMC

FMC Corp (NYSE: FMC) reported fourth quarter results, showing 42 percent year-over-year revenue growth and above-consensus bottom-line result. The company also issued upbeat adjusted earnings per share guidance for the fiscal year 2018 and the first quarter.

The Analyst

Loop Capital Markets analyst Chris Kapsch has a Buy rating on FMC and upped his price target from $108 to $111.

The Thesis

FMC's Q4 results and 2018 outlook and the management's overall strategic narrative are quite positive, Kapsch said in a note. Strong Agricultural Solutions segment sales and earnings, particularly in the company's legacy business, should allay concerns about soft Latin American demand and/or the potential for a weak Safrinha season, the analyst said.

Kapsch expects the company to outgrow the overall Ag market in 2018 due to reduced channel inventories in its legacy product lines and the broader global adoption of the acquired DuPont pesticides.

"Positive momentum should be sustained throughout 2018, and arguably over at least the next several years, based on FMC's commentary," Loop Capital said.

As such, the firm slightly reduced its 2018 earnings per share estimate, citing an unexpectedly higher tax rate. With the upward revision to EBITDA numbers, the firm increased its price target to $111, suggesting roughly 36 percent upside from current levels.

"Accordingly, we view the recent pullback in FMC shares as a truly compelling buying opportunity," the firm said.

The Price Action

FMC Corp shares are up about 40 percent over the past year, although they're down about 13 percent for the year-to-date period.

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Latest Ratings for FMC

Feb 2018Seaport GlobalUpgradesNeutralBuy
Feb 2018Credit SuisseMaintainsOutperformOutperform
Feb 2018CitigroupUpgradesNeutralBuy

View More Analyst Ratings for FMC
View the Latest Analyst Ratings

Posted-In: Chris Kapsch Loop Capital MarketsAnalyst Color Price Target Analyst Ratings


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