Shares of agricultural chemical company FMC Corporation (FMC 19.54%) plunged 20.7% on Thursday as of 1:00 p.m. EDT. FMC's stock had risen about that much year-to-date before yesterday, following a 71.5% decline in 2025, so the stock essentially just gave back its year-to-date gains today.
FMC released fourth-quarter earnings last night, which came in below expectations. Furthermore, management disclosed that the Board of Directors had authorized exploring "strategic options," including selling the company outright.
Sometimes such an announcement causes a stock to rise as investors anticipate a buyout at a higher price. However, in this case, the disclosure appeared to signal that management may be throwing in the towel on an immediate turnaround.
NYSE: FMC
Key Data Points
FMC disappoints again, and guides for further declines in 2026
In the fourth quarter, FMC reported $1.08 billion in revenue, down 12% and missing expectations, as well as adjusted (non-GAAP) earnings per share of $1.20, down 33% from the prior-year quarter, which met expectations.
FMC continues to operate in a difficult agricultural downcycle, with management noting an overcapacity of agricultural chemicals and low margins for growers. Additionally, FMC's chemical portfolio has largely gone off-patent, forcing the company to lower prices. That's a bad combination for generating profits, on top of FMC's $4.07 billion in debt, which is 5.8 times the company's $700 million EBITDA guidance for 2026 -- a rather high debt-to-profits ratio.
Management's preliminary outlook for 2026 calls for another 5% decline in revenue to $3.7 billion at the midpoint of the range, a 17% decline in adjusted EBITDA to $700 million, and a 41% decline in adjusted EPS to $1.76 at the midpoint. Management also said its goal for the year was to pay down some of its debt load, mainly through asset sales, including the India business that is already up for sale, as well as licensing some of its chemicals to other companies.
Image source: Getty Images.
FMC gives conflicting signals amid strategic review
FMC management did try to encourage investors that its current on-patent chemicals should grow handily in the future. Management forecasts about $300 million to $400 million in 2026 sales for these new chemicals, or about 10% of its revenue, with these chemicals growing to $800 million by 2028, $1 billion by 2030, and $2 billion in revenue by 2035.
However, it's a bit strange that the company would be willing to sell the business before the impact of these new products kicks in. The stock is down 88% from its all-time high, and the share price as of this writing only trades for 7.7 times this year's lowered adjusted EPS forecast.
Therefore, one wonders why the company may be willing to sell at the lows, so to speak, if these new chemicals are really set to take off as management projects. Nevertheless, FMC's bargain-basement valuation and the prospect of a sale could make it a speculative buy for high-risk traders. For long-term investors, however, this whole story still looks too risky at present.
