Banc Of America upgraded FMC (FMC) to buy from neutral, explaining that the stock price has become 19% cheaper since Aug. 3.
FMC makes various chemical products ranging from insecticides and herbicides to materials like soda ash and hydrogen peroxide. The stock's recent decline in value comes in the wake of natural gas cost inflation and lower agricultural chemicals guidance, analyst Kevin McCarthy says. He considers the stock inexpensive considering that 25% of FMC's sales are derived from higher quality specialty businesses, not only agricultural products. He's confident in his $5.02 2006 earnings per share estimate given the expectation for an increase of 25% to 30% in US soda ash prices for 2006. He notes that with limited growth in global supply, 2007 could be another up year for FMC. He raises his $57 target to $59.