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FMC Corp (FMC) Up 43% in 3 Months: What's Behind the Rally?

Anindya Barman
·4-min read

Shares of FMC Corporation FMC have shot up 43.3% over the past three months. The company has also outperformed its industry’s rise of 32.1% over the same time frame.  

FMC has a market cap of roughly $12.7 billion. Average volume of shares traded in the last three months was around 1,024.8K. 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 Going in FMC’s Favor?

Better-than-expected earnings performance in the first quarter and upbeat guidance for 2020 have contributed to the run-up in FMC’s shares. The company’s adjusted earnings per share of $1.84 for the first quarter topped the Zacks Consensus Estimate of $1.81.

FMC, last month, said that it envisions 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 sees adjusted EBITDA of $1.23-$1.34 billion for 2020, indicating 5% growth at the midpoint versus 2019.

FMC is gaining from strong demand for its herbicides and insecticides and its efforts to expand product portfolio and boost market position. 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.

The company also remains committed to return value to 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.

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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 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 53.6% for the current year. The company’s shares have gained roughly 30% 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 54.9% 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 68% in a year. It currently has a Zacks Rank #2.

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FMC Corporation (FMC) : Free Stock Analysis Report
 
FrancoNevada Corporation (FNV) : Free Stock Analysis Report
 
Barrick Gold Corporation (GOLD) : Free Stock Analysis Report
 
Agnico Eagle Mines Limited (AEM) : Free Stock Analysis Report
 
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