FMC stock poised to grow as demand for agriculture rises – Magic Post

Now that the latest data on inflation and demand in the US economy has been released and the Federal Reserve (Fed) has decided to cut interest rates for the third time in a row, a new cycle in agricultural stocks and the manufacturing sector may be underway. This is why the current view on the key supplier in the industry becomes important for investors to consider moving forward.

Egg prices and their rise have surprised many investors in recent days with the release of the Producer Price Index. While there are some stock picks that could lead investors into a potential market direction in the coming months, now is the time to start looking at other sectors to keep the momentum going in the agricultural space. This is where fertilizer and machinery stocks come into play.

Sure, like stocks Caterpillar company New York Stock Exchange: CAT and Deere & Co New York Stock Exchange: D They are potential picks to see demand rise in the new agricultural cycle, not to mention other sectors such as construction with lower interest rates. However, before machinery and equipment make their way to farms and fields, FMC Company New York Stock Exchange: FMC It is likely to be the first winner in this field as a manufacturer of fertilizers and specialty chemicals, as this land needs to be prepared before being worked on.

Wall Street analysts recognize the inherent upside in FMC stock

FMC Today

$50.15 +2.29 (+4.78%)

(As of 12/20/2024 at 05:31 PM ET)

52 week range

$47.73

▼

$68.72

Dividend yield

4.63%

P/E ratio

4.32

Price target

$65.69

price Fertilizers go downWhich means that input costs for companies like FMC will also fall. Now that demand is back in the industry, this will likely lead to higher margins and profits for the company. Activity in the field of manufacturing and services Purchasing Managers’ Indices (PMI). I will repeat this topic.

Of all the industries in these sectors, the trend favors the chemical and agricultural industries together, putting the odds in favor of names like FMC today. This can be seen from the current earnings per share (EPS) forecasts for the next 12 months issued by Wall Street.

Analysts are now forecasting as much as $0.98 per share next year, which translates to a significant 42% jump from $0.69 per share today. This expansion is enough to keep momentum alive for the retail price in the coming months, which is why other analysts are ready to express their bullish views through ratings and price targets.

Those at Mizuho were bold enough to lead the pack as of November 2024, placing a valuation of $70 per share, up from their previous view of $64 per share. To prove this new valuation, FMC stock would have to rise as much as 42.5% from where it trades today, which is also in line with current EPS expectations for next year.

The markets agree with this view: what the comparisons look like

Knowing what Wall Street thinks about a stock is only half the equation; The other half is knowing what Main Street thinks about the stock in question. Investors can gauge this aspect by checking FMC stock and its ratios alongside similar peers Mosaic Company New York Stock Exchange: Moss and CF Industries Company New York Stock Exchange: CF.

When it comes to earnings growth, FMC’s EPS growth of 42% is higher than the expected 0.5% for Mosaic stock and the 6% contraction for CF Industries. This opens the possibility that FMC will soon be favored over its counterparts in the fertilizer and specialty agrochemical industry.

Then comes the fact that State Street insiders decided to boost their institutional holdings in FMC stock by 27.3% as of November 2024, bringing their net position to a high of $417.1 million or a 5% ownership in the company. This gives investors another bullish metric to consider when developing a potential buy case.

There’s a reason EPS exceeding analyst expectations is supporting the upside in FMC stock today, and it comes from new management strategy. FMC management only Anthony DiSilvestro added To the company’s Board of Directors, a person with years of experience as the Chief Financial Officer (CFO) of Mattel company NASDAQ:MAT To effectively implement the cost reduction plans now implemented at FMC.

If successful, this program will add to the tailwind behind FMC stock, as the effects of these cost-cutting initiatives may not yet be reflected in today’s EPS forecasts. This is another factor that investors need to consider in the current theme running behind FMC stock.

A final check can be done by focusing on other sectors in the agricultural value chain, and that’s where Caterpillar and Deere stocks come into play. For Caterpillar, analysts at JP Morgan Chase felt confident enough in these trends to maintain an Overweight rating on Caterpillar and a $515 price target on the stock to call for an upside of up to 41.5% from where it is trading today.

This trend continues for Deere stock, with those at Jefferies Financial Group seeing a $510 valuation for the company with an upside of 20% from today’s levels. The fact that Wall Street is bullish on two sectors of the same industry should give investors the confidence they need to act on Purchasing Managers’ Index (PMI) and Producer Price Index (PPI) trends from recent weeks, and FMC is the outlier.

Before you consider FMC, you’ll want to hear this.

MarketBeat tracks the highest-rated and best-performing research analysts on Wall Street and the stocks they recommend to their clients on a daily basis. MarketBeat identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches up… and FMC was not on the list.

While FMC currently has a “Hold” rating among analysts, top-rated analysts believe these five stocks are better buys.

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