FMC Earnings: Stock Plummets as Brazil Drought Prolongs Inventory Destocking in 2024

After updating our model to incorporate FMC's fourth-quarter results, we maintain our $110 per share fair value estimate. Our narrow-moat rating is also unchanged. FMC's results were in line with our view that the inventory destocking that weighed on 2023 volumes will be complete by mid-2024. In our view, a drought in Brazil, FMC's largest market, weighed on fourth-quarter results and will prolong the period of inventory destocking among farmers and farm retailers in Brazil into 2024. However, we forecast revenue growth and a small adjusted EBITDA increase versus 2023.