FMC Corporation: Near-Term Earnings and Cash Flow Headwinds Offset by Restructuring-Driven Medium-Term Recovery, Justifying Hold Rating

Vincent Andrews, an analyst from Morgan Stanley, maintained the Hold rating on FMC. The associated price target remains the same with $17.00.

Vincent Andrews has given his Hold rating due to a combination of factors around FMC’s near-term earnings pressure and restructuring-driven improvement potential. He expects fourth-quarter 2025 EBITDA to land at the bottom of management’s guidance and below market expectations, mainly because of ongoing aggressive generic competition and resulting price declines in Brazil. While volumes appear broadly stable with normal application activity in key markets and North America is setting up for a typical season, the pricing environment is weak enough to constrain profitability. In addition, free cash flow for 2025 is projected to be negative and at the low end of company guidance, reflecting working capital pressures and elevated receivables, which together with leverage above 4x raises balance sheet concerns.
At the same time, Andrews acknowledges that FMC is taking action through its Project Foundation restructuring, which is aimed at delivering significant, recurring cost savings that support a gradual recovery in EBITDA beyond 2025. His updated estimates for 2026 and 2027 incorporate these savings and show an improvement in earnings, but the outlook remains clouded by uncertainty around post-patent dynamics for the key Rynaxypyr franchise, including both pricing and volumes from 2026 onward. Given the mix of earnings headwinds, cash flow risk, and leverage on one hand, and cost-reduction initiatives and potential medium-term recovery on the other, he concludes the risk/reward profile is balanced rather than clearly attractive or clearly negative, leading to a Hold recommendation.

According to TipRanks, Andrews is a 2-star analyst with an average return of 0.9% and a 55.91% success rate. Andrews covers the Basic Materials sector, focusing on stocks such as Sherwin-Williams Company, LyondellBasell, and Mosaic Co.

In another report released yesterday, Citi also maintained a Hold rating on the stock with a $14.00 price target.