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FMC Corp (FMC) Gains on Strong Demand Amid Cost Headwinds
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FMC Corporation (FMC - Free Report) is benefiting from higher demand, pricing actions and new product launches amid headwinds from higher raw material costs and unfavorable currency swings.
The company’s shares are up 14.2% in the past year compared with a 30.2% rise of the industry.
Image Source: Zacks Investment Research
FMC Corp, a Zacks Rank #3 (Hold) stock, is witnessing healthy demand for its industry leading products, driven by strong global agricultural market fundamentals. It is well placed to capitalize on the underlying strength in global crop protection markets thanks to high commodity prices.
The strong demand environment coupled with the company’s price increase actions is driving its top line. It is actively taking price increase measures to mitigate the impact of cost inflation.
Moreover, FMC remains focused on boosting its market position and strengthening its product portfolio. It is investing in technologies and products as well as new launches to enhance value to the farmers. New products launched in Europe, North America and Asia are gaining significant traction and are contributing to volume growth. Product introductions are expected to support the company’s results this year.
The acquisition of BioPhero ApS, a Denmark-based pheromone research and production company, also adds biologically produced state-of-the-art pheromone insect control technology to the company’s product portfolio and R&D pipeline, highlighting FMC's role as a leader in delivering innovative and sustainable crop protection solutions.
The company also remains committed to return value to shareholders leveraging healthy cash flows. It expects to generate free cash flow of $440-$560 million in 2022. FMC Corp. also expects to return up to around $470 million to shareholders through dividends and share repurchases in 2022.
However, FMC is being challenged by higher logistics and raw materials costs due to supply disruptions. The supply disruptions, exacerbated by the Russia-Ukraine conflict, have resulted in rising costs of some raw materials and active ingredients. Along with higher packaging costs, raw material and logistics costs are likely to remain elevated through 2022. Pandemic-related shutdowns in China and elevated energy costs in Europe are the other concerns. Higher raw materials and logistics costs might impact the company’s performance.
The company also faces headwinds from unfavorable currency swings. It is particularly challenged by currency headwinds associated with the weakening of European currencies. Currency headwinds are expected to weigh on the company’s performance in 2022.
Better-ranked stocks worth considering in the basic materials space include Olympic Steel, Inc. (ZEUS - Free Report) , Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) and Commercial Metals Company (CMC - Free Report) .
Olympic Steel currently sports a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for ZEUS's current-year earnings has been revised 4.8% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Olympic Steel’s earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 25.4%, on average. ZEUS has rallied around 43% in a year.
Sociedad has a projected earnings growth rate of 540.5% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 1.5% upward in the past 60 days.
Sociedad has a trailing four-quarter earnings surprise of roughly 37.4%. SQM has rallied roughly 64% in a year. The company currently carries a Zacks Rank #1.
Commercial Metals currently carries a Zacks Rank #1. The consensus estimate for CMC's current-year earnings has been revised 8.7% upward in the past 60 days.
Commercial Metals’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 19.7%, on average. CMC has gained around 40% in a year.
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FMC Corp (FMC) Gains on Strong Demand Amid Cost Headwinds
FMC Corporation (FMC - Free Report) is benefiting from higher demand, pricing actions and new product launches amid headwinds from higher raw material costs and unfavorable currency swings.
The company’s shares are up 14.2% in the past year compared with a 30.2% rise of the industry.
Image Source: Zacks Investment Research
FMC Corp, a Zacks Rank #3 (Hold) stock, is witnessing healthy demand for its industry leading products, driven by strong global agricultural market fundamentals. It is well placed to capitalize on the underlying strength in global crop protection markets thanks to high commodity prices.
The strong demand environment coupled with the company’s price increase actions is driving its top line. It is actively taking price increase measures to mitigate the impact of cost inflation.
Moreover, FMC remains focused on boosting its market position and strengthening its product portfolio. It is investing in technologies and products as well as new launches to enhance value to the farmers. New products launched in Europe, North America and Asia are gaining significant traction and are contributing to volume growth. Product introductions are expected to support the company’s results this year.
The acquisition of BioPhero ApS, a Denmark-based pheromone research and production company, also adds biologically produced state-of-the-art pheromone insect control technology to the company’s product portfolio and R&D pipeline, highlighting FMC's role as a leader in delivering innovative and sustainable crop protection solutions.
The company also remains committed to return value to shareholders leveraging healthy cash flows. It expects to generate free cash flow of $440-$560 million in 2022. FMC Corp. also expects to return up to around $470 million to shareholders through dividends and share repurchases in 2022.
However, FMC is being challenged by higher logistics and raw materials costs due to supply disruptions. The supply disruptions, exacerbated by the Russia-Ukraine conflict, have resulted in rising costs of some raw materials and active ingredients. Along with higher packaging costs, raw material and logistics costs are likely to remain elevated through 2022. Pandemic-related shutdowns in China and elevated energy costs in Europe are the other concerns. Higher raw materials and logistics costs might impact the company’s performance.
The company also faces headwinds from unfavorable currency swings. It is particularly challenged by currency headwinds associated with the weakening of European currencies. Currency headwinds are expected to weigh on the company’s performance in 2022.
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 include Olympic Steel, Inc. (ZEUS - Free Report) , Sociedad Quimica y Minera de Chile S.A. (SQM - Free Report) and Commercial Metals Company (CMC - Free Report) .
Olympic Steel currently sports a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for ZEUS's current-year earnings has been revised 4.8% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
Olympic Steel’s earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 25.4%, on average. ZEUS has rallied around 43% in a year.
Sociedad has a projected earnings growth rate of 540.5% for the current year. The Zacks Consensus Estimate for SQM’s current-year earnings has been revised 1.5% upward in the past 60 days.
Sociedad has a trailing four-quarter earnings surprise of roughly 37.4%. SQM has rallied roughly 64% in a year. The company currently carries a Zacks Rank #1.
Commercial Metals currently carries a Zacks Rank #1. The consensus estimate for CMC's current-year earnings has been revised 8.7% upward in the past 60 days.
Commercial Metals’ earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 19.7%, on average. CMC has gained around 40% in a year.