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FMC Corp Poised on Lithium Unit Strength, Growth Actions

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On Sep 4, we issued an updated research report on FMC Corporation (FMC - Free Report) .

FMC Corp., which has a market capitalization of $11.7 billion, is a leading diversified chemical company that serves agricultural, industrial, environmental and consumer markets across the globe.

FMC Corp. has significantly outperformed the industry it belongs to over a year. The company’s shares have rallied 87.1% over this period compared with the industry’s gain of 18.9% over the same period.


 

FMC Corp. is benefiting from its strategic investments, acquisitions and efforts to expand its market position and strengthen its portfolio. The company is investing in technologies in its agriculture business and launching new products with a goal to enhance value to farmers.

FMC Corp. is seeing strong demand in its Lithium unit. The company is expanding its lithium hydroxide production capacity. It is executing this expansion in three phases. The move is based on the growing demand for electric vehicles. The company expects its lithium business to deliver strong earnings growth in 2017.

FMC Corp., in August 2017, raised its outlook for the Lithium unit for 2017. The company now sees revenues in the range of $340-$360 million (up from $325-$365 million expected earlier) for the unit. Segment earnings are forecast to be in the band of $115 to $125 million (up from $100 to $120 million expected earlier) for the year.

Moreover, acquisitions and development agreements are adding strength to the company’s agricultural business. The buyout of Cheminova A/S has reinforced FMC Corp.'s agriculture business and expanded its access in major agricultural end markets.

The planned acquisition of a major portion of DuPont's Crop Protection business has also provided a significant growth platform for FMC’s Agricultural Solutions unit. After deal closure, FMC Corp.’s Agricultural Solutions unit will become the fifth biggest crop protection chemical company in the world by sales with estimated annual revenues of around $3.8 billion. The acquisition will significantly increase the company’s presence in Asia and Europe and will be immediately accretive to its adjusted earnings per share.

That said, FMC Corp. remains exposed to challenging agriculture market fundamentals. Agricultural market conditions remain challenging in North America due to elevated channel inventory levels and lower farm income due to weak commodity prices, affecting farmer demand in the region. The company is also seeing sluggishness in the European agricultural market.

FMC Corp. is a Zacks Rank #3 (Hold) stock.

FMC Corporation Price and Consensus

 

FMC Corporation Price and Consensus | FMC Corporation Quote

Stocks to Consider

Stocks in the basic materials space worth considering include The Chemours Company (CC - Free Report) , Kronos Worldwide Inc (KRO - Free Report) and Kraton Corporation . All three sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Chemours has expected long-term earnings growth rate of 15.5%.

Kronos Worldwide has expected long-term earnings growth rate of 5%.

Kraton has expected earnings growth of 7.2% for the current year.

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