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FMC Stock Has Been Skyrocketing since November

PART:
1 2 3 4
Part 3
FMC Stock Has Been Skyrocketing since November PART 3 OF 4

Why Most Analysts Recommend a ‘Hold’ for FMC

Analysts’ recommendations for FMC

As of December 28, 2016, 19 brokerage firms are actively tracking FMC (FMC) stock. About 37% of these analysts have recommended a “buy” for the stock, while 58% of the analysts have recommended a “hold.”

Why Most Analysts Recommend a &#8216;Hold&#8217; for FMC

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Analysts have a 12-month target price of ~$56.75 for FMC, implying a return potential of 0.1% based on its closing price of $56.66 as of December 28, 2016. Since September, analysts have increased the target price of FMC from $50 in September to its current target price of $56.75. The increase in target price was driven by better-than-expected 3Q16 earnings.

Why are analysts recommending a “hold” for FMC?

With FMC posting better 3Q16 earnings, it appears that analysts have adopted a wait and watch policy to see whether FMC can continue its performance in the upcoming days.

Peer comparison

  • As of December 28, 2016, 16 brokerage firms are actively tracking Albemarle (ALB). About 50.0% of them have recommended a “buy” for the stock, while 50% of the analysts have recommended a “hold.” The analyst consensus indicates a 12-month target price of $91.36, implying a return potential of ~5.5% from its closing price of $86.58 as of December 28, 2016.
  • 12 brokerage firms actively track Sociedad Quimica Y Minera De Chile SA (SQM). About 33% of them have recommended a “buy” for the stock. 42% have recommended a “hold,” and the remaining 25% have recommended a “sell.” The analysts’ consensus indicates a 12-month target price of $29.54, implying a return potential of ~4.5% from its closing price of $28.26 as of December 28, 2016.

Investors can get exposure to FMC by investing in the Guggenheim S&P 500 Equal Weight Materials ETF (RTM), which invests 4.0% of its portfolio in FMC. The top holdings of the fund include CF Industries Holding (CF) and Dow Chemical (DOW), which have weights of 4.3% and 4.2%, respectively, as of December 28, 2016.

In the next part, we’ll look into FMC’s latest valuations in comparison with peers.

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