FMC: Investor Day Confirms Our View That Strong R&D Pipeline Should Drive Long-Term Profit Growth

Our key takeaway from FMC's investor day was the strength of the company's pipeline. Our long-term thesis on FMC has been that the company's strong pipeline will generate sales growth at a mid-single-digit rate, even when including the impact of the diamide patent expirations. These patent contributions made up 36% of FMC's revenue in 2022. We forecast FMC will generate growth from its pipeline of traditional crop chemicals and biologicals, with each product category contributing around half of the premium product revenue growth. As the company launches and ramps up new products, we see a clear path for adjusted EBITDA margins to recover to the mid-20% level, after falling to the low-20% level this year.