FMC Corporation (FMC): A Bull Case Theory

We came across a bullish thesis on FMC Corporation on Value Investing subreddit by Expensive-While-7720. In this article, we will summarize the bulls’ thesis on FMC. FMC Corporation's share was trading at $16.02 as of January 28th. FMC’s trailing and forward P/E were 30.22 and 7.18 respectively according to Yahoo Finance.

FMC Corporation, an agricultural sciences company, provides crop protection solutions to farmers in Latin America, North America, Europe, the Middle East, Africa, and Asia. FMC has emerged as a compelling deep-value opportunity following a severe sell-off driven by agricultural demand weakness, pricing pressure, and a dramatic reset of its dividend policy.

A leading global crop protection company with a broad portfolio spanning insecticides, herbicides, fungicides, seed treatments, biologicals, and precision agriculture technologies, FMC has been caught in a confluence of cyclical headwinds, distributor destocking, and rising leverage concerns. The roughly 83% dividend cut proved to be a turning point, triggering capitulation from income-focused investors and rapidly reframing the stock from a perceived defensive yield play into a cyclical deleveraging and recovery story.

Despite the stock’s sharp decline, the underlying business remains operationally sound, though clearly under pressure. Third-quarter 2025 revenue declined materially due to restructuring actions in India, while core sales excluding India were down approximately 10% amid ongoing pricing headwinds. Notably, adjusted earnings improved year over year, reflecting disciplined cost controls and favorable product mix, signaling that management retains some levers to protect profitability even in a difficult demand environment.

FMC continues to invest in its pipeline of new active ingredients, biological products, and advanced application technologies, which historically supported its strong margins and competitive positioning. The central risk—and primary source of market anxiety—lies in FMC’s balance sheet. With roughly $4.5 billion in debt against expected EBITDA of about $850 million, leverage exceeds 5×, an elevated level for a cyclical chemicals business facing uncertain near-term demand.

The dividend cut underscores management’s focus on preserving liquidity, executing potential non-core divestitures such as the India business, and prioritizing debt reduction ahead of refinancing needs. Looking forward, the investment case hinges on an eventual agricultural cycle recovery and successful execution on deleveraging and commercialization. While near-term visibility remains limited, the stock reflects significant pessimism, leaving meaningful upside if operating conditions stabilize and balance sheet pressure eases.

Previously, we covered a bullish thesis on Corteva, Inc. (CTVA) by Business Model Mastery in May 2025, which highlighted its IP moat, high-margin trait licensing and biologicals, digital lock-in via LANDVisor™, and global growth engine. CTVA’s stock price has appreciated by 18.20% since our coverage. Expensive-While-7720 shares a similar thesis on FMC Corporation (FMC) but emphasizes a deep-value cyclical setup with agricultural headwinds, dividend reset, and leverage reduction.

FMC Corporation is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 35 hedge fund portfolios held FMC at the end of the third quarter which was 43 in the previous quarter. While we acknowledge the risk and potential of FMC as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than FMC and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.