Why FMC Stock Keeps Dropping

Core Viewpoint - FMC's stock has experienced significant declines following a substantial revenue miss in Q3, with ongoing negative sentiment from analysts impacting its performance [1][3][7]. Financial Performance - FMC reported a 49% drop in revenue for Q3, totaling $542 million, attributed to significant one-time commercial actions in India [3]. - The company faced GAAP losses of $4.52 per share for the quarter [3]. - Analysts have downgraded the stock, with Morgan Stanley and Goldman Sachs reducing price targets to $17 and $19, respectively [4]. Dividend and Competition - FMC announced an 86% cut in its dividend, reducing the payout from $0.50 to $0.08 per share, which has contributed to negative analyst sentiment [4]. - The company is facing intense competition from generic agricultural chemicals in Latin America, leading to pricing pressures and reduced profitability [4]. Future Earnings Outlook - Analysts predict a loss for FMC in 2025, but some expect earnings of $2.41 per share next year, with a potential decline to $2.21 per share [6][7]. - Morgan Stanley has adjusted its earnings forecast to be 8% lower than the consensus on Wall Street [5]. Valuation Metrics - FMC's stock is currently priced around $14.60, resulting in a P/E ratio of 6.6x. However, when accounting for $4.2 billion in net debt, the debt-adjusted P/E ratio rises to approximately 13x, which is considered high given the company's current challenges [8].