Instead Buy This Unstoppable Farming Titan That’s Up 11% in 2025 and Still Running
Fertilizer company FMC has seen its share price fall throughout 2025, but there is another agriculture stock generating positive gains.
Agricultural machinery manufacturer Deere has increased by approximately 11% since the beginning of the year, despite the negative macroeconomic conditions in agriculture.
While FMC’s future is highly uncertain, Deere may have a path to higher prices due to its drive to sell AI-powered services to its customers.
To say there are investors would be an understatement. MYK(NYSE:FMC) We’ve had a difficult year. Shares of the fertilizer and agricultural chemicals company have fallen nearly 73% since the beginning of the year. In comparison, S&P 500 index increased by almost 17%.
FMC’s significant declines were primarily due to weak results and the company’s decision to reduce its quarterly dividend from $0.48 per share to $0.08 per share. Worse, the powder doesn’t seem to disperse completely. Uncertainty about the company’s future remains high, casting doubt on whether its time has come. buy dip.
By contrast, there’s another agricultural stock that not only far outperformed FMC, but could be on track to deliver steady, solid returns for years to come by leveraging advances in artificial intelligence (AI) to create an entirely new revenue stream. The “other agricultural stock” I mentioned Deere & Co.(NYSE:DE).
Image source: Getty Images.
In some cases, buying on weakness can be a profitable strategy. In other cases, this is like trying to catch a falling knife. This year FMC was the best example of this. Investors who bought between $30 and $40 per share after the initial decline last winter suffered heavy losses when the stock lost value again in October following the news of the dividend cut.
This event resulted in shares falling from $30 to $12.17 per share. Currently FMC is trading modestly above its lows, but don’t assume it’s all uphill from here. Lately, Barclays analyst Benjamin Theurer downgraded the stock, citing the possibility of further market share losses and margin pressure. Theurer also noted that downgrading FMC’s credit rating could complicate restructuring efforts.
Yes, FMC’s forward valuation reflects this high uncertainty. Currently, the stock is trading at a forward price-to-earnings (P/E) multiple of just 6. This is well below the valuation of similar agricultural input stocks. CF Industries And Mosaic Company. Both of these names are currently trading at discounted forward valuations.
Additionally, it may be right to assume that future developments will continue to put pressure on the stock until positive news arrives. For example, if management or analysts backtrack further on their 2026 expectations, it could lead to a further pullback for FMC.
Unlike FMC, Deere has seen much more stable price performance. Shares are up 11% year to date. Although this stock has experienced some volatility and pulled back in recent months due to challenges in the agricultural sector, it has shown resilience compared to what FMC has been experiencing.
Even better, Deere’s 11% gain in 2025 S&P 500A period of much stronger share price performance may be on the horizon. The company has been turning to selling technology-enabled recurring services for years.
Deere aims to grow this business further, creating a solid, recurring revenue stream for the company. This, combined with improving macroeconomic conditions in the agricultural sector, could pave the way for Deere to achieve its 2026-2030 growth and margin targets.
Management is targeting 10% annual sales growth and 20% operating margin. Operating margins have recently averaged around 17%. Wall Street is skeptical of these plans, but this could work to the investor’s advantage.
Deere shares may seem expensive right now at 28 times forward earnings. Competitors like it CNH Industrial And toro trade at much lower forward price/earnings ratios. Still, if Deere’s tech pivot is successful, this stock could not only hold its value but also add to it.
Taking into account Deere’s growth strategy, analysts’ estimates project the company’s earnings per share (EPS) to grow 49% between fiscal years ending October 2026 and October 2028, or more than 14% on an annualized basis.
Effective earnings growth could be even stronger, depending on how quickly the aforementioned macroeconomic challenges in agriculture resolve. Also consider Deere’s dividend. The forward dividend yield may only be 1.38%, but it has been growing steadily in recent years.
When you put it all together, there’s a lot to suggest a solid total return for this stock going forward. So, if you are positive about the industry, go for FMC and make Deere your top choice.
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Thomas Niel It has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Deere & Company. The Motley Fool recommends Barclays Plc and Toro. The Motley Fool has a feature disclosure policy.
