FMC Technologies (FTI) Looks Overpriced -Barron's

Shares of FMC Technologies (NYSE: FTI) could be headed downward, according to a Barron's article published this weekend.

The article points out that FMC has recently outperformed the market: its stock price has doubled over the last year, it has grown EPS by more than 30% over the last 5 years, while at the same time boosting its market share to 40%. Moreover, following strong Q1 earnings, reported at the end of April, management boosted its full year outlook.

While these may all be fundamental positives, the Barron's article contends that the market is now pricing shares of FMC Tech. "for perfection." Trading at 25x this years earnings, Wall Street has embedded a 20% earnings growth rate into FMC's valuation. Cited in the article, an analyst at Citigroup believes this level of growth is not achievable and sees growth of 9-10% as more likely. Putting this into perspective, FMC is trading at a P/E twice as much as Schlumberger (NYSE: SLB), the current leader in the oil services group.

FMC Technologies, Inc. designs, manufactures, and services machinery and systems for the energy, food processing, and air transportation industries in the United States and internationally.

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