Why FMC Rallied in March, Even As Markets Fell

Shares of agricultural chemical producer FMC Corporation (NYSE: FMC) rallied 16.8% in March, according to data from S&P Global Market Intelligence.

FMC entered March having lost significant value, with the stock having declined 72% in 2025. Last year, a crop down-cycle combined with a significant number of FMC products coming off-patent, leading to pricing pressure and lower margins.

However, the war in Iran, which broke out Feb. 28, has led to a supply crunch for certain agricultural chemical inputs, which appears to be benefiting FMC. In addition, the company's CEO appeared at an industry conference, where he said that a good-sized number of buyers were considering FMC as a potential acquisition target.

FMC gets a commodities-related bounce, plus buyout talk

In mid-March at the JPMorgan & Chase Industrials conference, FMC CEO Pierre Brondeau said that banks -- likely, investment banks that help broker acquisitions -- were in discussions with between five and 10 parties about a potential acquisition of FMC.

That being said, Brondeau also noted that FMC's shareholders were divided over a potential sale. After all, FMC is down significantly from its highs and has new chemicals in its development pipeline. Investors may wish to see those research and development efforts come to fruition before considering a buyout.

Still, the fact that so many parties were interested in the company might have surprised public market investors, who may have bid the stock up, given that buyout interest may lower the risk of further price declines.

And of course, the war in Iran, which broke out on the last day of February, certainly helped some commodity companies, FMC included. That's because shortly after the war began, Iran's leadership declared that any ship passing through the Strait of Hormuz would be attacked.

The Strait of Hormuz is the small waterway between Iran and Oman through which 20% of the world's oil flows. But in addition to oil, the strait is also a crucial waterway for the transport of other commodities, such as urea and ammonia, which are used to make fertilizers. That has tightened the market for agricultural chemicals a bit, which would help U.S.-based FMC. That being said, the impact on the fertilizer industry has been much more modest than on the energy industry.

Image source: Getty Images.

Can FMC continue coming back?

Even though the overall picture looks better for FMC now, it's still a risky bet. The company has $4.1 billion in debt, a substantial amount on top of its $2.2 billion market cap. Furthermore, we won't really know how much FMC will benefit from the current supply crunch until the company reports earnings. Wall Street analysts only expect the benefit to be minimal, so the company could disappoint when it reports.

That being said, there is some cause for optimism. On April 6, FMC announced that its new herbicide, Isoflex, had been approved in the European Union. While Isoflex had already been approved in other geographies, the EU approval could set the company up for better financial results for the rest of this year.

All in all, FMC remains an interesting turnaround candidate, but with high risk, given the various uncertainties surrounding the war, competition, and cyclicality of the agriculture industry, as well as the desire of buyers to make a bid for the company.

JPMorgan Chase is an advertising partner of Motley Fool Money. Billy Duberstein and/or his clients have positions in FMC and has the following options: short January 2027 $30 calls on FMC. The Motley Fool has positions in and recommends JPMorgan Chase. The Motley Fool has a disclosure policy.