FMC Corp

We will discontinue analyst coverage of FMC on or about June 2, 2026. 

We provide analyst research and ratings on over 1,600 companies globally and periodically adjust our coverage according to investor interest and staffing.

We cut our fair value estimate to $25 per share from $60 following fourth-quarter results. We assume roughly a 9% weighted average cost of capital. While FMC management is pursuing deals including asset sales, licensing agreements, and a potential sale of the company, our fair value estimate will not reflect any of these until a deal is announced.

In the near term, we see falling EBITDA as diamide patent expirations weigh on profits. We estimate the diamides generated 35% of revenue in 2025. We forecast FMC will see its fourth straight year of profit declines and see companywide adjusted EBITDA falling to less than half of 2022 levels with margins compressing to the high teens from the historical levels of the mid-20% range.

Over the long term, we see a return to growth but at a slower pace as we forecast a slower rate of new product launches in both FMC's new synthetic and biologicals products. We forecast adjusted EBITDA margin will recover to the low-20% range over the next decade.

In a downside scenario, we assume FMC's new products fail to fully replace the profitability of its diamides. As a result, revenue falls over the next few years and does not recover while margins remain in the high teens. Our fair value estimate falls to $10 in this scenario.

Finally, we ran an asset sale divestiture scenario, where we assume FMC breaks up the company by selling each business line. In this scenario, we value the company at $45 per share. The bulk of our valuation comes from the sale of the company's four new premium products, where we see strong long-term growth, which we estimate could be worth over $5 billion combined.

We award a narrow economic moat rating to FMC for intangible assets as patented crop protection products provide the company with pricing power. Similar to pharmaceutical companies, crop chemical companies realize premium prices on their patented products, generating returns in excess of the cost of capital. It typically takes 5-10 years to bring new products to market. In addition to years of research and development, these chemicals require regulatory approvals as they are tested for consumer, environmental, and worker safety.

Approved patents have protection that lasts for 20 years from the research phase on the active ingredient, which is known as the molecule. Crop chemical companies, including FMC, take additional steps to extend a successful product’s patent life by up to five years by patenting the product formula and specific manufacturing processes. Particularly successful patents are often licensed by competitors. While FMC is smaller than the largest companies in the industry, it has nevertheless built a valuable portfolio of patents. The crop chemical industry is composed of sales of herbicides, insecticides, and fungicides. FMC operates in all three segments, with strong assets in herbicides and insecticides.

FMC’s two largest patented products, diamides, accounted for 35% of sales in 2024. These products were included in the acquisition of DuPont's crop chemical portfolio. The molecules began to go off patent in 2022, with manufacturing patents beginning to expire in 2026. Sulfentrazone, FMC’s third-largest patented product, is an example of the company's patent portfolio strength before the DuPont acquisition. In North and South America, decades of use of glyphosate and other top herbicides have led to growing acres of weed resistance to those chemicals. Sulfentrazone helps farmers treat glyphosate-resistant acres. While sulfentrazone’s molecule is off patent, the company has licensing agreements with generic crop chemical producers that allow FMC to maintain solid profit margins, albeit at lower sales. FMC has implemented the same partner licensing strategy with the diamides, which should reduce the pace of deterioration of its sales and profits from the diamide patent expirations, as has been the case with sulfentrazone.

Additionally, FMC's portfolio of new products in the pipeline should somewhat protect expiring patents. FMC has multiple new crop chemical molecules under development, including multiple new modes of action. These new products should be particularly effective against insects, weeds, and fungi that have grown resistant to traditional crop chemicals. Management estimates the peak sales of its four best new product launches will be $2 billion, roughly in line with current diamide sales. Further, the company aims to achieve $2 billion in biologicals sales. These products also command a premium price, giving FMC a strong pipeline to fully replace diamide sales as the patents expire later this decade. With bug resistance growing globally and increased regulations banning the use of a growing number of synthetic chemicals, demand for FMC's new products should allow the company to continue to safely outearn its cost of capital over at least the next decade.

FMC has transformed its portfolio to focus on crop chemicals, which should see strong growth prospects as yield gains are needed to support rising food consumption from emerging markets.

FMC's focus on developing new biologicals will prove value-accretive as these crop protection products continue to take market share from synthetic crop chemicals.

FMC's pipeline should allow the company to grow long-term profits over the next decade.

FMC's patents have begun to expire for its two largest molecules. This will weigh on long-term profits as the company will face declining sales and margin compression from the patent expirations.

Management has made value-destructive acquisitions, and the current plan to either divest businesses or sell the company entirely will likely prove value-destructive for shareholders.

As a crop chemical producer, FMC is exposed to the decreased insecticide demand resulting from greater adoption of insect-resistant, genetically modified crops.