FMC stock took a hit on Tuesday following the release of what one analyst referred to as “disappointing” guidance for the fiscal year.
According to BMO Capital Markets analyst Joel Jackson, the projected guidance for 2024 suggests flat earnings for the year. Jackson, who rates the stock as Neutral with a $63 price target, expressed his concerns in a research note.
In the report released after trading hours on Monday, FMC stated that it expects to report fiscal 2024 revenue ranging between $4.5 billion and $4.7 billion. This falls short of analysts’ expectations of $4.7 billion, as reported by FactSet. The adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the year are now projected to be between $900 million and $1.05 billion, compared to analysts’ estimates of $1.08 billion.
These latest projections are lower than previously guided during the investor day on November 16, where FMC predicted revenue between $4.65 billion and $4.85 billion, with EBITDA between $1.03 billion and $1.13 billion.
In response to the news, FMC shares plummeted 14% in premarket trading on Tuesday, reaching $52.25. Over the past 12 months, the stock has experienced a 52% decline, making it the top decliner in the S&P 500 during premarket trading. Meanwhile, S&P 500 futures were down 0.1%.
For its fourth quarter, FMC reported earnings of $1.07 per share on revenue of $1.15 billion. However, analysts surveyed by FactSet had expected earnings of $1.08 per share on revenue of $1.24 billion.
FMC’s Chief Executive Mark Douglas addressed the challenges faced during the fourth quarter, citing continued channel destocking in all regions and drought in Brazil that intensified difficulties in Latin America.
KeyBanc Capital Markets analyst Aleksey Yefremov, who rates the stock as Overweight with a $63 price target, believes that until volume and margins show signs of improvement (predicted to be in mid-’24), the stock may continue to be weighed down by company-specific challenges.
In conclusion, FMC’s disappointing fiscal guidance has had a significant impact on the stock’s performance. Analysts and investors alike will be closely monitoring the company’s future developments.
