North America Fertilizers & Agricultural Chemicals: FMC & CTVA Announce Rimisoxafen Licensing Agreement

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North America Fertilizers & Agricultural Chemicals: FMC & CTVA Announce Rimisoxafen Licensing Agreement

ve fluctuated in recent years and may continue to do so.

If the impact on the company from any of these factors proves to be greater than we anticipate, the stock will likely have

difficulty achieving our target price. Likewise, if any of these factors proves to have less of an effect than we anticipate, the stock

could outperform our target.

FMC

(FMC.N; US$11.6; 2H; 16 Jun 26; 16:00)

Valuation

We apply a ~8.5x EV/EBITDA multiple to our 2027 EBITDA estimate of ~$739mm, resulting in a $17 target price. We think FMC

should trade at a discount to its closest competitor due to high-net leverage and some discretionary pressure on Crop

Protection chemicals. FMC’s FY2 EV/EBITDA multiple has ranged between ~8.0-13.5x, with an average of ~11x over the past

five years. We think a multiple close to the low end of the range is appropriate to reflect balance sheet pressure and uncertainty

in execution of its growth strategy.

Risks

This stock is High Risk based on our quantitative model, and we believe this classification is appropriate for FMC due to recent

stock price volatility, elevated leverage, dividend risk, and uncertainty in execution of its diamides strategy.

We note the following risks to the shares achieving our target price:

Exposure to Cyclical Ag End-Market: FMC’s core business is in providing agricultural crop protection solutions, so it is heavily

dependent on farmers’ profitability and how much they are willing to allocate to crop inputs. FMC’s business is largely sensitive

to farmers who may consider cutting back on crop protection applications.

Competitive Markets: The Crop Protection business has notable global and regional competitors. It is not immune to