Story updated at 9:55 a.m. to reflect market activity.
Shares of FMC gained 0.8% to $26.76 in morning trading.
The analyst firm also lowered its EPS estimates for the chemical company through 2015. Keybanc analysts now expect FMC to report earnings of $4 a share for full year 2014, down from previous estimates of $4.20 a share for the year. The firm lowered its 2015 estimates for the company to $4.20 a share from $5.15 a share.
"While near-term trends for Ag Solutions appear more challenging than expected, we believe the New FMC will be a leader in Crop Protection, which historically has been a solid growth area for chemicals, as well as participate in steady growth in the Health and Nutrition markets," analysts Michael J. Sison and Curtis Siegmeyer wrote.
Separately, TheStreet Ratings team rates FMC CORP as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate FMC CORP (FMC) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, growth in earnings per share, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- FMC's revenue growth has slightly outpaced the industry average of 7.5%. Since the same quarter one year prior, revenues rose by 12.8%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- FMC CORP has improved earnings per share by 5.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. 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 ($4.19 versus $3.31).
- 39.61% 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 11.04% trails the industry average.
- FMC's debt-to-equity ratio of 0.99 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 0.95 is weak.
- 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