BofA Securities Downgrades FMC Corp. (FMC) to Neutral, 'Significantly lower growth outlook'

BofA Securities analyst Steve Byrne downgraded FMC Corp. (NYSE: FMC) from Buy to Neutral with a price target of $63.00 (from $101.00).

The analyst comments "This morning FMC disclosed another surprise profit warning, based on Q3 volumes and continued destocking globally but mostly in Brazil. While in September management had indicated results were trending at the lower-end of its outlook (i.e., EBITDA of $240-290mn and sales of $1.19-1.27bn), today it announced that it expects Q3 sales of $982mn and EBITDA of $175mn. Moreover, FMC reduced its 4Q EBITDA outlook by roughly half, and talked about destocking continuing into 2024. It appears that volumes in 2H23 are now down ~25-30% with a 2024 recovery limited due to a potentially tough 1Q24; the 4Q guide also points to declining prices by our math, putting further pressure on earnings. In response we cut our 2023E EBITDA to $1,002mn from $1,310mn and see little recovery next year to $1,056mn (from $1,492mn previously). Our confidence in the company’s prospects has been greatly reduced, and we lower our PO substantially at an unchanged 10x 2024E EBITDA to $63 from $101. While we could be at the trough, 2024 doesn’t look much better. We downgrade FMC to Neutral from Buy."

For an analyst ratings summary and ratings history on FMC Corp. click here. For more ratings news on FMC Corp. click here.

Shares of FMC Corp. closed at $66.95 yesterday.

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