FMC stock (NYSE: FMC), an agricultural science company focused on products to improve crop yield and quality, has seen a large 37% fall in a week, amid a bleak outlook for 2025. It delivered mixed fourth-quarter results, with earnings surpassing but revenue falling short of analyst expectations. The company posted sales of $1.22 billion, below the projected $1.34 billion, as lower pricing and unfavorable foreign exchange rates impacted revenue. However, adjusted earnings per share came in at $1.79, beating the consensus forecast of $1.60. While FMC’s outlook was dim, so was that for BMY stock. Should You Pick Bristol Myers Squibb Stock At $57?
Now, FMC stock is down 43% since the beginning of 2024, underperforming the broader S&P500 index, up 26%. Although much of this decline came last week, the inventory de-stocking issue has weighed on the company’s performance lately. If you are looking for an upside with a smoother ride than an individual stock, consider the High-Quality portfolio, which has outperformed the S&P, and clocked >91% returns since inception.
FMC’s revenue of $1.22 billion in Q4 was up 7% y-o-y, and up 12% on an organic basis. It saw a 15% jump in volumes, driven by an increased demand in North America, while its overall pricing remained soft. Looking at segments, North America was up 23%, Latin America down 10%, Asia up 10%, EMEA up 18%, and the Plant Health sales were up 33%.
FMC saw its adjusted EBITDA margin expand by 550 bps to 27.7% in Q4, compared to 22.2% in the prior-year quarter. Higher revenues and margin expansion resulted in earnings of $1.79 per share, up 67% y-o-y. Looking forward, FMC expects its 2025 sales to be $4.25 billion and adjusted earnings of $3.48 per share, at the mid-points of the provided range. This is much lower than the consensus estimates of $4.40 billion and $4.36, respectively.
A large gap in outlook didn’t sit well with the investors and the stock dropped over 30% after the results announcement. The volatility in FMC stock is not something new. Even if we look at a slightly longer time frame, the changes in FMC stock over the recent years have been far from consistent, with annual returns being more volatile than the S&P 500.
In contrast, the Trefis High Quality Portfolio, with a collection of 30 stocks, is much less volatile. And it has comfortably outperformed the S&P 500 over the last 4-year period. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.
Given the current uncertain macroeconomic environment around rate cuts and ongoing trade wars, could FMC face a similar situation as it did in 2021, 2023, and 2024 and underperform the S&P over the next 12 months — or will it see a recovery? After its recent fall, FMC stock does appear attractive from a valuation perspective. At its current levels of $35, it’s trading at just 1.0x trailing revenues, versus the stock’s average P/S ratio of 2.2x over the last five years. While the company’s dim 2025 outlook warrants a lower valuation multiple, we believe the current price-to-sales ratio has fallen excessively below its historical average. In our view, the current stock pullback presents an attractive entry point for long-term investors seeking robust future returns. Separately, up on a good quarter, see Buy, Sell, Or Hold PINS Stock At $40?
While FMC stock now looks undervalued, check out how FMC’s Peers fare on metrics that matter. You will find other valuable comparisons for companies across industries at Peer Comparisons.
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