FMC Corp. (NYSE:FMC) faces mounting pressure from cheaper generic pesticides, weak agricultural demand and elevated debt, prompting RBC Capital Markets to lower its price forecast ahead of the company’s third-quarter earnings.
The company is scheduled to report third-quarter earnings on Oct. 29.
FMC stock fell more than 2% in Friday’s premarket trading, extending losses after plunging 30.53% in the previous session.
In an Oct. 14 research note, RBC Capital Markets analyst Arun Viswanathan lowered his price forecast on FMC from $11 to $9 while maintaining a Sector Perform rating.
The analyst cited persistent competition, uncertainty over a fourth-quarter sales recovery and risks tied to FMC’s balance sheet.
FMC Slashes Outlook Amid Pricing Pressures
On Thursday, FMC sharply reduced its third-quarter outlook as it announced sweeping pricing and commercial changes to address weak demand and excess distributor inventory.
The company now expects third-quarter revenue of $65 million to $125 million, including $625 million to $675 million in charges related to those changes.
The revised outlook highlights the challenges FMC faces as generic pesticide competition intensifies and farmers remain cautious about spending.
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RBC Sees Regional Weakness, Long-Term Growth Opportunities
Viswanathan said FMC continues to face pressure from diamide-related challenges in Latin America. However, recent inventory reductions may have eased excess stock levels at distributors.
Generic competition and weak farm economics also continue to weigh on demand across regions.
Despite these challenges, FMC is seeing growth in newer products and branded sales. The potential European Union registration of Isoflex Active could provide another growth opportunity in 2027.
Viswanathan also identified Isoflex, Fluindapyr and plant health products as potential long-term growth drivers. However, execution risks and elevated debt remain concerns.
Fourth-Quarter Recovery Faces Major Hurdles
FMC expects a weak third quarter but could see sales increase by about $260 million sequentially in the fourth quarter, according to the analyst.
That recovery would include $150 million in non-diamide direct sales in Brazil, $70 million from new active ingredients and $40 million from branded Rynaxypyr, primarily in Latin America.
However, Viswanathan warned that the scale of the expected rebound creates execution risks, particularly as demand across the Asia-Pacific region remains weak.
FMC’s balance sheet adds another layer of uncertainty. Although management has not indicated plans to reduce its dividend, Viswanathan believes limited near-term free cash flow could make a cut possible.
FMC Price Action: FMC shares were down 2.05% at $5.505 during premarket trading on Friday, according to Benzinga Pro data.
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