Shares of FMC Corp. (FMC - Free Report) touched a new 52-week high of $56.23 yesterday, before pulling back to close the day at $56.12. The chemical maker has delivered a healthy year-to-date return of roughly 45%. The stock has also gained around 20% over a month. Average volume of shares traded over the last three months is roughly 1,030K.
Factors to Consider
FMC Corp. swung to a profit in third-quarter 2016. Its adjusted earnings topped the Zacks Consensus Estimate while sales met expectations.
FMC Corp. should gain from strategic investments, Cheminova A/S acquisition and new product launches. The company remains committed to expand its market position and strengthen its portfolio. Acquisitions and development agreements are also adding strength to the company’s agricultural business.
The company is also reducing corporate costs through reduced discretionary spending, global procurement initiatives and layoffs. FMC Corp. has also restructured its operations in Brazil to align it with market conditions and rationalize product offerings. Moreover, the sale of the alkali chemicals business has enabled FMC Corp. to de-lever its balance sheet to an extent which is best fit for the company.
The company is also making a good progress with the integration of the acquired operations of Cheminova A/S. The buyout reinforces FMC Corp.'s core agriculture business and expands its access in major agricultural end markets. The company expects to deliver Cheminova-related full run rate cost savings of $140 million to $160 million by mid-2017.
In its lithium business, the company is seeing strong demand across specialty end markets. A significant long-term driver for the lithium business is the expected rapid adoption of lithium-ion batteries in electric vehicles. The company, earlier this year, said that it will triple its lithium hydroxide production capacity by adding 20,000 metric tons per year. The decision is based on the growing demand for electric vehicles.
FMC Corp., in October, also landed a new long-term supply deal with Quebec, Canada-based Nemaska Lithium, Inc. Under the deal, Nemaska will provide FMC Corp. with 8,000 metric tons of lithium carbonate annually starting in mid-2018. The deal will further diversify FMC Corp.’s supply sources. FMC Corp. has raised its earnings expectations for the Lithium unit for 2016 based on strong year-to-date performance.
FMC Corp. currently carries a Zacks Rank #1 (Strong Buy).
Other Stocks to Consider
Other well-placed companies in the chemical space include The Chemours Company (CC - Free Report) , Koppers Holdings Inc. (KOP - Free Report) and Celanese Corporation (CE - Free Report) .
Chemours holds a Zacks Rank #1 an has an expected earnings growth of around 44.7% for the current year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Koppers Holdings, a Zacks Rank #1 stock, has an expected earnings growth of 62.4% for the current year.
Celanese sports a Zacks Rank #2 (Buy) and has an expected earnings growth of around 9.5% for the current year.
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