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MSFT   411.65 (+2.35%)
META   486.13 (+3.87%)
GOOGL   144.09 (+1.08%)
AMZN   174.58 (+3.55%)
TSLA   197.41 (+1.36%)
NVDA   785.38 (+16.40%)
NIO   5.85 (-2.01%)
AMD   181.86 (+10.69%)
BABA   76.12 (+0.70%)
T   16.59 (-2.41%)
F   12.12 (-0.16%)
MU   85.91 (+5.42%)
CGC   3.37 (-2.03%)
GE   151.67 (+1.74%)
DIS   107.63 (-0.04%)
AMC   4.42 (-3.28%)
PFE   27.55 (-0.43%)
PYPL   58.35 (+1.51%)
XOM   104.76 (-0.09%)
QQQ   438.07 (+2.93%)
AAPL   184.37 (+1.12%)
MSFT   411.65 (+2.35%)
META   486.13 (+3.87%)
GOOGL   144.09 (+1.08%)
AMZN   174.58 (+3.55%)
TSLA   197.41 (+1.36%)
NVDA   785.38 (+16.40%)
NIO   5.85 (-2.01%)
AMD   181.86 (+10.69%)
BABA   76.12 (+0.70%)
T   16.59 (-2.41%)
F   12.12 (-0.16%)
MU   85.91 (+5.42%)
CGC   3.37 (-2.03%)
GE   151.67 (+1.74%)
DIS   107.63 (-0.04%)
AMC   4.42 (-3.28%)
PFE   27.55 (-0.43%)
PYPL   58.35 (+1.51%)
XOM   104.76 (-0.09%)
QQQ   438.07 (+2.93%)
AAPL   184.37 (+1.12%)
MSFT   411.65 (+2.35%)
META   486.13 (+3.87%)
GOOGL   144.09 (+1.08%)
AMZN   174.58 (+3.55%)
TSLA   197.41 (+1.36%)
NVDA   785.38 (+16.40%)
NIO   5.85 (-2.01%)
AMD   181.86 (+10.69%)
BABA   76.12 (+0.70%)
T   16.59 (-2.41%)
F   12.12 (-0.16%)
MU   85.91 (+5.42%)
CGC   3.37 (-2.03%)
GE   151.67 (+1.74%)
DIS   107.63 (-0.04%)
AMC   4.42 (-3.28%)
PFE   27.55 (-0.43%)
PYPL   58.35 (+1.51%)
XOM   104.76 (-0.09%)

FMC stock just set a new ceiling higher, 50% higher indeed

photo of laptop computer with fmc logo on white background

Key Points

  • FMC stock could quickly become a trader favorite in the current industry expansion caught in the chemical and agricultural space.
  • Understanding that this is a trend already expressed by Wall Street's most prominent names can help you line up your portfolio for it.
  • Analysts may have gotten the tip, so double-digit upside is the theme all over FMC.
  • 5 stocks we like better than NVIDIA

The stock market is about to go on a new tear. Some may call it a continuation of an existing trend. Others may consider it an explosive turnaround. Where do the indices get room to make a turnaround after the S&P 500 and NASDAQ hit a new all-time high? Well, the truth is that not all stocks are created equal in this rally; some are struggling to keep up with the rest of the pack.

Today, there are plenty of reasons to look at the industrial stocks space, mainly those names that make a buck from operating in chemical products. Even analysts at the biggest Wall Street names have caught on to the fact that 2024 could be filled with lots of price action sponsored by the FED itself, but more on that later.

For now, all you need to remember is that FMC NYSE: FMC is the stock to keep on your watchlist as the underlying chemicals industry begins heating up after a long period of contraction. But wait, there's more; FMC is something of a "double whammy" in the sense that it is also riding on the awakening of the agricultural stocks space; get ready to dig in.

Side with the pros

When investment banks look to recommend stocks to their clients, or traders engage in "proprietary" activities, which is fancy for using the bank's money to trade, they follow a repeatable process to come up with ideas of where money should be put to work.

In short, this process is called "top-down" analysis, and here is how that goes. Starting with the economy itself, it looks like the markets are very bullish on the future of the U.S. economy, as they have sent most indexes to all-time highs, but not all sectors share the same momentum.


The Technology Select Sector SPDR Fund NYSEARCA: XLK has outperformed the S&P 500 by as much as 24.3% over the past twelve months, which makes sense when you see tech stocks like NVIDIA NASDAQ: NVDA making new highs as well.

On the opposite end of the spectrum, the Industrial Select Sector SPDR Fund NYSEARCA: XLI has been left behind, underperforming the S&P by a wide 7.8% gap. This would, of course, leave you and other investors with the opportunity to close down this gap when the time is right; that time might be now.

Analysts at The Goldman Sachs Group NYSE: GS have expressed their view of a manufacturing sector breakout in the U.S., which you can find in their 2024 macro outlook report.

Now that the FED is looking to cut interest rates later this year, a weaker dollar could spark export activity, pumping the manufacturing sector with new orders left and right.

You can see this in the ISM manufacturing PMI index, where chemicals saw their first breakout into expansion after contracting for the past quarter. This is something pro traders always look for. But there is another tailwind helping FMC hop into this trend as well.

The coast is clear

You see, not only is the chemical industry looking to turn itself around into an expansionary trend, but FMC is just as exposed to the agriculture industry, as its chemicals are used for fertilizers and other necessary farming products.

In the Services PMI, the agricultural space has also broken out of its contraction trend, showing the first expansion in the past quarter. The "top-down" process dictates that these industries could be the ones to bring you higher potential returns, so long as you pick the right stocks. So why is FMC the right one?

Breaking down the chemicals industry, there are two things you should look for to spot the outliers. First, earnings per share growth is a crucial factor for these stocks. You'll want to look at both the past twelve months and the next twelve months of EPS growth.

Secondly, you need to gauge how much markets will pay for this growth, which you can do through the forward P/E ratio or a more straightforward price-to-book ratio. Here, FMC shines next to competitors like Valvoline NYSE: VVV and LyondellBasell Industries NYSE: LYB.

While Valvoline grew its EPS by an impressive 32.2% in the past year, analysts only expect a 23.1% for the next twelve months; not a record worthy of a turnaround in the sector, now, is it?

More than that, the stock trades at 97% of its 52-week high price and at a 25.2x P/B ratio. Even with double-digit growth, there isn't much room for this stock to fly higher.

For LyondellBasell, the story isn't so different. Last year's EPS growth stood at 9.2%, and 2024 projects a mere 10.6% growth. That's barely anything to write home about, so analysts only see a 5.8% upside in their price target of $100.9 a share.

Markets price this stock at 2.4x P/B, which aligns with the industry's average of – also – 2.4x. FMC saw a contraction in EPS of 14.5% last year, while analysts are pushing the turnaround story with 2024 projected EPS advances of 29.6%! Now that fits a turnaround narrative, doesn't it?

Markets have yet to wake up to analysts seeing a price target of $78.2 a share, calling for a 51.2% upside from today's prices. The stock trades 2.2x P/B as a discount to the industry average despite bringing markets above-average gro,wth and the turnaround pros are looking for.

Will you be smarter than them or will you be first to the party?

→ 66,000% upside on tiny biotech? (From Behind the Markets) (Ad)

Should you invest $1,000 in NVIDIA right now?

Before you consider NVIDIA, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and NVIDIA wasn't on the list.

While NVIDIA currently has a "Moderate Buy" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

13 Stocks Institutional Investors Won't Stop Buying Cover

Which stocks are major institutional investors including hedge funds and endowments buying in today's market? Click the link below and we'll send you MarketBeat's list of thirteen stocks that institutional investors are buying up as quickly as they can.

Get This Free Report

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Technology Select Sector SPDR Fund (XLK)N/A$205.77+3.3%0.63%20.04HoldN/A
Industrial Select Sector SPDR Fund (XLI)N/A$119.59+1.2%1.35%16.72N/AN/A
The Goldman Sachs Group (GS)
4.7809 of 5 stars
$390.47+0.6%2.82%17.11Moderate Buy$409.93
Valvoline (VVV)
1.6587 of 5 stars
$41.11+0.5%N/A5.11Moderate Buy$40.71
LyondellBasell Industries (LYB)
4.3247 of 5 stars
$98.29+0.9%5.09%15.19Hold$100.92
FMC (FMC)
4.9493 of 5 stars
$51.65+1.1%4.49%4.91Hold$74.53
NVIDIA (NVDA)
4.7937 of 5 stars
$785.38+16.4%0.02%103.61Moderate Buy$701.93
Compare These Stocks  Add These Stocks to My Watchlist 

Gabriel Osorio-Mazilli

About Gabriel Osorio-Mazilli

  • gosoriomazzilli@gmail.com

Contributing Author

Value Stocks, Asian Markets, Macro Economics

Experience

Gabriel Osorio-Mazilli has been a contributing writer for MarketBeat since 2023.

Areas of Expertise

Value investing, long/short trading, options, emerging markets

Education

CFA Level I candidate; Goldman Sachs corporate training; independent courses

Past Experience

Analyst at Goldman Sachs, associate at Citigroup, senior financial analyst in real estate


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