Citigroup remains cautiously optimistic on agrichemical companies; raises PT

FMC

29/01/2025 11:55

** Citigroup raises price targets on agrichemical firms
Corteva  CTVA.N  to $74 from $69 and FMC Corp  FMC.N  to $61
from $55
    ** Brokerage says CTVA and FMC have outperformed the broader
market, reflective of firming crop prices and fewer concerns on
destocking
    ** Adds that supply and demand dynamics for both corn and
soybean have tightened after U.S. Department of Agriculture's
World Agricultural Supply and Demand Estimates report produced a
constructive data for the agricultural sector going into 2025
    ** Brokerage sees improvement in farmer incomes as an
indicator of future higher spend on high quality seeds and crop
protection chemicals
    ** "While stock-to-use ratios will likely improve in
2024-2025 and 2025-2026, strained U.S.-China trade relations may
challenge soybean consumption" - Citigroup
    ** Brokerage expects Latin American growing season to
improve from 2024, with projected La Niña stability until
mid-2025 and normal rain levels; LatAm is a large revenue driver
for CTVA and FMC
    ** In 2024, CTVA was up 24% and FMC was down 16%
    

 (Reporting by Pooja Menon in Bengaluru)
 ((Pooja.Menon@thomsonreuters.com;))