Shares of FMC Corporation (FMC 1.79%) rallied 19.6% this week through Thursday trading, according to data from S&P Global Market Intelligence.
FMC's shares plunged an ignominious 72% in 2025, after several of its proprietary agricultural chemicals came off-patent, increasing competition during a difficult downturn in the crop cycle.
However, shares are bouncing from very low levels of late, as the Middle East conflict is cutting off supplies of certain fertilizers, raising global prices. The improved pricing outlook was also reaffirmed by a Wall Street analyst, who raised his price target on FMC shares this week.
NYSE: FMC
Key Data Points
Citi lifts its FMC price target
On Monday, sell-side analyst Patrick Cunningham at Citigroup (C +0.52%) raised his price target on FMC shares from $14 to $15. In his note, he cited higher fertilizer prices resulting from the war in Iran, which has choked off traffic through the Strait of Hormuz and constrained supply from affected countries.
While much of the market's attention is focused on the war's impact on the energy industry, roughly one-third of the world's urea and half of its ammonia actually come from countries affected by the war, much of which flows through the Strait. Thus, the recent conflict has led to a rise in fertilizer prices, which should benefit agriculture stocks generally and FMC specifically, whose operations are mostly outside the Middle East.
That being said, Cunningham notes that the war has thus far only raised fertilizer prices around the margins, nowhere near the impact on energy prices. Hence, the mere $1 price target increase.
Image source: Getty Images.
FMC shares may also be rising due to stock-specific factors, specifically management's exploration of offers to sell the company. Last week, CEO Pierre Brondeau said that his advisors were in talks with between five and 10 interested parties. With that many interested buyers, it's possible a deal may be reached in the near-to-medium term.
Given that buyouts are often made at substantial premiums to a company's stock price, last week's disclosure could be contributing to this week's price action. And FMC's buyout potential would be doubly attractive to investors if a risk-off sentiment were to take hold of the broader market.
FMC is a risky turnaround
FMC might have caught a lucky break with the current supply disruptions in agricultural chemicals; however, it remains a risky turnaround play. There are good reasons the company was down so much in 2025, and FMC has a substantial debt load to contend with. Moreover, betting on a buyout should never be the sole reason to invest, as one might not materialize.
As such, FMC remains a buy only for those with a high risk tolerance. That being said, there could be more upside if chemical price increases sustain, or if a buyer makes an attractive acquisition offer.
