Analysts Just Shaved Their FMC Corporation (NYSE:FMC) Forecasts Dramatically

One thing we could say about the analysts on FMC Corporation (NYSE:FMC) - they aren't optimistic, having just made a major negative revision to their near-term (statutory) forecasts for the organization. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting the analysts have soured majorly on the business.

Following the latest downgrade, the 17 analysts covering FMC provided consensus estimates of US$5.4b revenue in 2023, which would reflect a discernible 7.1% decline on its sales over the past 12 months. Statutory earnings per share are anticipated to reduce 4.0% to US$6.27 in the same period. Before this latest update, the analysts had been forecasting revenues of US$6.1b and earnings per share (EPS) of US$7.40 in 2023. Indeed, we can see that the analysts are a lot more bearish about FMC's prospects, administering a substantial drop in revenue estimates and slashing their EPS estimates to boot.

View our latest analysis for FMC

The consensus price target fell 11% to US$126, with the weaker earnings outlook clearly leading analyst valuation estimates. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic FMC analyst has a price target of US$155 per share, while the most pessimistic values it at US$101. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the FMC's past performance and to peers in the same industry. We would highlight that sales are expected to reverse, with a forecast 9.4% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 7.7% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 3.5% annually for the foreseeable future. It's pretty clear that FMC's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The biggest issue in the new estimates is that analysts have reduced their earnings per share estimates, suggesting business headwinds lay ahead for FMC. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. With a serious cut to this year's expectations and a falling price target, we wouldn't be surprised if investors were becoming wary of FMC.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for FMC going out to 2025, and you can see them free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies that insiders are buying.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.