FMC (FMC.N): Ripping the Bandage Off; Model Update post Callback

FMC shares fell ~31% after sharply lower guidance tied to comprehensive commercial actions to return to growth. Slower-moving higher-priced FMC products represent an increasing portion of customer inventories, likely an overhang for several quarters and limiting sales of higher-priced products, including new products. FMC is also offering lower-priced products in the U.S. from the outset and minimizing the rebate model. Excluding $650mm of charges, underlying sales and EBITDA would have been $745mm and $113mm, both below the low end of guidance. We cut our 3Q26 EBITDA estimate to $(534)mm from $138mm and our 2027E EBITDA to $540mm from $664mm; FY26/FY27 FCF estimates fall to $72mm/$14mm. Valuing FMC at ~8.5x FY27 EBITDA yields a $6 target price (from $12). We maintain Neutral/High Risk and remain on the sidelines given elevated cash-flow risk, awaiting details on cash levers and debt covenants.