Why FMC Corp. (FMC) Stock Is Lower This Morning

NEW YORK (TheStreet) -- Shares of FMC Corp. (FMC) are down -0.95% to $68.60 in pre-market trading on Monday after Jefferies (JEF) downgraded its rating to "hold" from "buy" and reduced its price target to $78 from $85.

Jefferies citied the potential for agrichemical destocking and risks to Brazil sugarcane in 2015.

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Separately, TheStreet Ratings team rates FMC CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate FMC CORP (FMC) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, increase in stock price during the past year and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 7.2%. Since the same quarter one year prior, revenues slightly increased by 3.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • FMC CORP's earnings per share declined by 10.4% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, FMC CORP increased its bottom line by earning $3.31 versus $3.20 in the prior year. This year, the market expects an improvement in earnings ($4.21 versus $3.31).
  • 38.72% is the gross profit margin for FMC CORP which we consider to be strong. Regardless of FMC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 6.96% trails the industry average.
  • Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. The stock's price rise over the last year has driven it to a level which is somewhat expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. When compared to other companies in the Chemicals industry and the overall market, FMC CORP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • You can view the full analysis from the report here: FMC Ratings Report
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