We recently compiled a list of the 7 Best Agriculture Stocks to Buy Right Now. In this article, we are going to take a look at where FMC Corporation (NYSE:FMC) stands against the other agriculture stocks.
Global Agriculture: Trends, Challenges, and Opportunities Ahead
The global agriculture market is currently experiencing significant changes driven by various factors, including population growth, climate change, and technological advancements.
According to a report by The Business Research Company, the global agriculture market was valued at $13.27 trillion in 2023. The market is expected to expand at a compound annual growth rate (CAGR) of 7.7% during 2024-2028 to reach a value of $19.28 trillion by the end of the forecast period. The agriculture market is primarily driven by the increasing demand for food due to a rapidly growing population, which is projected to reach 9.7 billion people by 2050 according to estimates by the United Nations.
Additionally, advancements in technology, such as precision agriculture and automation, are transforming farming practices, allowing for more efficient use of resources and higher crop yields.
The OECD-FAO Agricultural Outlook 2024-2033 highlights significant trends in the global agriculture market. Over the past 20 years, the demand for agricultural products has grown, primarily due to population and income increases in low- and middle-income countries. These nations have also boosted their production by adopting new technologies and better utilizing their natural resources.
Looking ahead, total consumption of agricultural and fisheries products is expected to rise by 1.0% annually over the next decade, mainly in low- and middle-income regions. Global food consumption is projected to increase by 1.2% each year, driven by population growth and rising incomes. Notably, the use of crops for animal feed is anticipated to grow faster than direct food consumption. This shift reflects a trend towards more animal-based diets, leading to increased livestock production.
In middle-income countries, daily calorie intake per person is expected to rise by 7% by 2033, fueled by higher consumption of staple foods, livestock products, and fats. On the other hand, low-income countries will see a modest 4% increase in calorie intake. This slower growth indicates challenges in achieving the Sustainable Development Goal of eliminating hunger by 2030.
High-income countries are also changing their dietary habits, with a slight decrease in fat and sugar intake as people become more health-conscious. Overall, these trends suggest that while there is growth in food consumption globally, disparities remain between different income levels.
Our Methodology
To compile our list of the 7 best agriculture stocks to buy right now, we used the Finviz and Yahoo stock screeners to find the largest agriculture companies. We also reviewed our own rankings and consulted various reports to compile a list of the best agriculture stocks.
From an initial pool of over 20 agriculture stocks, we focused on the stocks that analysts believe possess the greatest potential for growth. Finally, we ranked the 7 best agriculture stocks to buy right now based on their average price target upside potential according to analysts as of November 14, 2024.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A bustling warehouse stocked with irrigation supplies, fertilizer, grass seed, ice melt products, pesticides, and landscape accessories.
FMC Corporation (NYSE:FMC)
Average Upside Potential According to Analysts: 26.17%
FMC Corporation (NYSE:FMC) is an American agricultural sciences company. The company develops and markets a range of products, including herbicides, insecticides, and fungicides. FMC is one of the best agriculture stocks to buy right now.
In the third quarter of 2024, the company reported revenues of $1.07 billion, marking a 9% increase compared to the same period last year. FMC Corporation (NYSE:FMC) turned around from a net loss of $4 million in Q3 2023 to a net income of $66 million this quarter, thanks to higher sales and reduced costs from restructuring efforts. Notably, the introduction of new products like the fluindapyr-based fungicide commercialized in Brazil, Argentina, and Paraguay has contributed significantly to this growth.
FMC Corporation (NYSE:FMC) is also focused on improving its financial performance through aggressive cost-saving measures. The company has increased its restructuring savings target to between $125 million and $150 million for 2024, with expectations of achieving over $225 million in gross savings by 2025. This includes realigning manufacturing operations and using attrition to reduce costs.
On November 1, 2024, FMC Corporation (NYSE:FMC) announced that it has completed the sale of its Global Specialty Solutions business to Envu, a strategic move that will allow FMC to concentrate solely on its crop protection business.
In addition, FMC Corporation (NYSE:FMC) generated a free cash flow of $132 million in the third quarter, reflecting an improvement of $100 million from the previous year.
With strong revenue growth, effective cost management strategies, and a clear focus on core agricultural products, FMC Corporation (NYSE:FMC) presents an attractive investment opportunity in the agriculture sector.
Overall, FMC ranks 5th on our list of the best agriculture stocks to buy right now. While we acknowledge the potential of FMC as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than FMC but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
