Analysts cautious on FMC after pricing reset, outlook cut
FMC•FMC cut its third-quarter outlook and forecast up to $675 million in charges tied to price cuts and changes to its U.S. pricing model. Analysts lowered price targets, and Jefferies downgraded the stock to hold from buy.
1. Analysts cut targets
Mizuho cut its price target to $10 from $12, Jefferies lowered its target to $5 from $14 and downgraded FMC to hold from buy, and J.P. Morgan cut its target to $6 from $12. Mizuho said persistent industry pricing pressure from generic competition, particularly in Latin America, was a primary driver of FMC’s outlook cut.
2. Pricing and charges
FMC forecast up to $675 million in charges related to price cuts and changes to its U.S. pricing model. J.P. Morgan said FMC appeared to be absorbing $625 million to $675 million in charges through lower prices and customer rebates, while the ultimate cash impact remained unclear. FMC shares fell more than 30% on Thursday.
