FMC Corp (NYSE:FMC) — This large-cap growth company has been the focus of several increases, including Wells Fargo and CFRA (S&P Global Research), following the proposed acquisition of E I Du Pont De Nemours and Co’s (NYSE:DD) crop-protection division.
Reported revenues are expected to fall 19% in 2017 but rise 39% in 2018. The DD acquisition should begin to have a positive impact on sales as early as 2017’s Q4. And sales in the rapidly growing economies of Asia and Latin America should add to future earnings-per-share growth.
Standard & Poor’s raised their 12-month target on the shares by $5 to $81 and lifted their 2018 EPS forecast to $4.04 from $3.80. Their target of $81 appears modest to me, at just 20X ’18 earnings and accelerated growth expected from the DD purchase. Also an increase in Lithium earnings, driven by higher prices, is expected to accelerate, and even had a positive impact on 2017 Q1 earnings.
Technically, FMC stock is in a powerful bull market, emphasized by the seven-point breakout in late-March, which highlighted the DD acquisition. Following the break-away gap, the stock advanced to a new high at $75.93 and on yesterday made another new high at $76.02.
The consolidation that followed the gap took the form of a bullish rectangle (flag) and was supported by a fresh buy signal from the MACD indicator. Traders willing to take a risk in a large-cap stock, with special features that could propel it further should try to buy FMC stock at $75 with a trading target of $85.
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