FMC Corp (NYSE:FMC) — FMC is a large-cap producer of fertilizers and agricultural chemicals. Standard & Poor’s forecasts that revenues are estimated to rise 5.9% in 2017 and 5.4% in 2018. This rise is expected to occur due to increasing demand in Asia and Latin America for food products and continued strong growth in the Lithium segment.
FMC reported quarterly earnings per share of 88 cents, exceeding S&P’s forecast by 2 cents. Higher prices and cost-reduction efforts contributed to the earnings surprise and encouraged an increase in recurring EPS in 2017 to $3.45, up 22% from 2016’s $2.82 (excludes $1.26 of non-recurring charges).
They forecast 2018 EPS of $3.80.
FMC stock sold its Alkali division for $1.6 billion. That sale is projected to be able to generate free cash and could result in a significant share purchase plan and an increase in the common stock’s dividend. It will also provide enough cash for future acquisitions. S&P has a 12-month target of $64 which is 17.9X their forward 12-month earnings estimate. FMC now pays a dividend of 66 cents for an annualized dividend yield of 1.1%.
Technically, FMC stock is in a powerful bull market, which was triggered last November when it broke from a consolidation at $47 with a break-away gap. A run-up of $10 resulted in a consolidation that appeared to be in the form of a Head-&-Shoulders top.
However, instead of breaking down, the stock rejected the neck-line at $57 and is currently attempting to establish a new high, just $1.22 above Friday’s close. High accumulation supports a new high, as does a positive MACD. Thus, traders should try to buy FMC at $61 with a trading target of $70 for a proposed gain of over 14%.
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