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Raising FMC's FVE to $112 on Improved Near-Term Outlook; Shares Fairly Valued After 13% Rally

Seth Goldstein, CFA Senior Equity Analyst

Analyst Note

| Seth Goldstein, CFA |

FMC reported third-quarter results that were generally in line with our expectations. Adjusted EBITDA was up 12% from the prior-year quarter as volume growth and higher prices were partially offset by increased costs. While costs rose faster than prices during the quarter, we expect FMC will continue to increase prices and will be able to eventually pass along all cost inflation. We have updated our 2022 outlook to account for higher volume growth. Given our forecast for crop prices to remain elevated next year, we expect strong farmer demand for crop protection products in 2022. With the rest of our forecast largely unchanged, we raise our FMC fair value estimate to $112 per share from $108. Our narrow moat rating is unchanged.

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Company Profile

Business Description

FMC is a pure-play crop chemical company. The company has diversified its sales to create a balanced crop chemical portfolio across geographies and crop exposure. Through acquisitions, FMC is now one of the five largest patented crop chemical companies and will continue to develop new products through its research and development pipeline.

2929 Walnut Street
Philadelphia, PA, 19104
T +1 215 299-6000
Sector Basic Materials
Industry Agricultural Inputs
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Cyclical
Employees 6,400