We apply a ~9.25x EV/EBITDA multiple to our 2026 EBITDA estimate of ~$977mm, resulting in a $42 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 ~11.5x 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.

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. In periods where crop prices are unfavorable, FMC’s business is largely sensitive to farmers that may consider cutting back on crop protection applications.

Competitive Markets: The Crop Protection business has notable global and regional competitors. Though FMC focuses on differentiated technologies to provide the best in-house agriscience solutions, it is not immune to competitors that are constantly innovating and puts its global market share at risk.

Foreign Currency Exposure: FMC is an international company that operates in several geographic regions including NAM, LatAm, EMEA, and Asia. In recent years, its revenue proportion from LATAM has declined but is still generating north of 75% of its total revenues from ex-NAM regions. In particular, the company is exposed to foreign currency such as the Euro, Brazilian real, Canadian dollar, Mexican peso, and the Turkish Lira. Any unfavorable exchange rates between these currencies and the U.S. dollar may pose headwinds in the future.

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.