FMC
FMC Corporation
$12.97
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Strong
·
Conviction
Undervalued
Trading 76.1% below fair value
You pay
$12.97
Bear
$39.97
Fair
$54.24
Bull
$68.52
Bear
$39.97
+208.2%
$5.71 × 7x
Fair
$54.24
+318.2%
$5.71 × 10x
Bull
$68.52
+428.3%
$5.71 × 12x
Adjust Assumptions
9.5x
5.71$
Key Value Driver
Through-cycle normalized EPS ($5.71)
Implied Market Multiple
2.3x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (42 analysts)
$15.00
Divergence from AlphaVal
262%
Summary
Using 7-year normalized EPS of $5.71 at a 10x cycle multiple, the base-case value is $54.24 per share.
Warnings
This company has a built-in lending arm whose debt is mixed in with the main business. We capped the debt adjustment to avoid overstating what the core business owes.
Wall Street's average price target is $15.00 (from 42 analysts). Our estimate is 262% above the consensus -- consider that gap carefully.
This stock is 66% below its 52-week high, with weak or declining earnings. That combination often signals real trouble, even though the valuation below is based on other fundamentals.
Key Risks
- Standard 10-year DCF produces unreliable terminal values for cyclicals
- 'Cheap' P/E at cycle peak is the most common value trap — normalize first
- Captive finance subsidiaries have different risk profiles from manufacturing