FMC: Shares Are Materially Undervalued as 2024 Recovery and Strong Pipeline Drive Long-Term Growth

FMC shares have underperformed, falling 50% since the start of 2023. The decline was driven by a near-term slowdown from customer inventory destocking that prompted two guidance cuts. A current drought in Brazil, FMC's largest market, that will lead to lower crop production, leaves the market skeptical that FMC will realize revenue and profit growth in 2024 in line with guidance. Additionally, part of the stock selloff was driven by a short-seller report questioning FMC's long-term outlook. The report alleged FMC's diamides, its largest product category at 36% of 2022 revenue, would face generic competition in key markets two to three years before management guidance, threatening long-term profits.