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FMC (NYSE:FMC) just got hammered, plunging over 33.6% at 12.02pm today, after its Q4 earnings report left investors unimpressed. The company beat profit expectations with adjusted earnings of $1.79 per share, but revenue missed the mark at $1.2 billion, weighed down by foreign exchange headwinds and cautious inventory management. Worse, GAAP earnings flipped negative with a $0.13 per share loss, capping off a brutal year where total revenue dropped 5% and GAAP earnings nosedived 74%. CEO Pierre Brondeau tried to reassure investors by pointing to solid organic sales growth, but with customers cutting back on inventory, the outlook remains shaky.
Wall Street isn't buying the optimism. BofA Securities slashed its rating from Neutral to Underperform, trimming its price target to $48 from $61, citing a weak Q1 outlook and rising competition in FMC's high-margin diamide business. RBC Capital and Morgan Stanley followed with their own target cuts, pushing expectations as low as $46. Analysts are skeptical of FMC's ability to hit its 2025 guidance, which forecasts flat revenue growth and adjusted EPS between $3.26 and $3.70. With concerns mounting over financial leverage and the sustainability of its dividend, investors are left wondering if the worst is yet to come.
At multi-year lows, FMC stock looks like a falling knife. The company is battling intensifying generic competition, unpredictable demand, and investor skepticism that's only growing louder. Management is betting on a volume recovery and strong cash flow to stabilize things, but for now, the market isn't convinced. Until FMC proves it can turn the ship around, investors may want to stay on the sidelines.
This article first appeared on GuruFocus.