These Analysts Just Made A Significant Downgrade To Their FMC Corporation (NYSE:FMC) EPS Forecasts

Market forces rained on the parade of FMC Corporation (NYSE:FMC) shareholders today, when the analysts downgraded their forecasts for this year. Both revenue and earnings per share (EPS) forecasts went under the knife, suggesting analysts have soured majorly on the business.

Following the latest downgrade, the 18 analysts covering FMC provided consensus estimates of US$4.7b revenue in 2023, which would reflect a definite 13% decline on its sales over the past 12 months. Statutory earnings per share are anticipated to plummet 21% to US$4.56 in the same period. Before this latest update, the analysts had been forecasting revenues of US$5.2b and earnings per share (EPS) of US$5.58 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 18% to US$89.04, with the weaker earnings outlook clearly leading analyst valuation estimates.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with a forecast 24% annualised revenue decline to the end of 2023. That is a notable change from historical growth of 6.6% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 3.8% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - FMC is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their earnings per share estimates, expecting a clear decline in business conditions. Regrettably, they also downgraded their revenue estimates, and the latest forecasts imply the business will grow sales slower than the wider market. After such a stark change in sentiment from analysts, we'd understand if readers now felt a bit wary of FMC.

Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple FMC analysts - 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.