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Newmarket (NEU)
NYSE:NEU
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Newmarket (NEU) AI Stock Analysis

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NEU

Newmarket

(NYSE:NEU)

Rating:75Outperform
Price Target:
$810.00
▲(12.67%Upside)
Newmarket's strong financial performance, characterized by robust profitability and efficient cash generation, is the primary driver of its stock score. The technical analysis indicates bullish momentum but warns of potential overvaluation. Valuation metrics suggest the stock is fairly valued, while the earnings call provides a balanced view of growth opportunities and challenges. Overall, the stock is positioned well but requires careful monitoring of market conditions.

Newmarket (NEU) vs. SPDR S&P 500 ETF (SPY)

Newmarket Business Overview & Revenue Model

Company DescriptionNewmarket (NEU) is a leading company operating in the technology and data analytics sector. It specializes in providing innovative software solutions and platforms aimed at enhancing decision-making processes for businesses across various industries. NEU's core products include data analytics tools, artificial intelligence-driven insights, and cloud-based software services designed to optimize business operations and drive growth.
How the Company Makes MoneyNewmarket (NEU) generates revenue primarily through the sale of its software products and subscription-based services. The company offers tiered pricing models for its cloud-based solutions, allowing clients to choose packages that best suit their needs. Additionally, NEU partners with other technology firms to incorporate its analytics tools into broader enterprise solutions, earning revenue through licensing agreements and strategic partnerships. Consulting services and custom data solutions also contribute to NEU's earnings, as businesses seek tailored insights and expertise to leverage data effectively.

Newmarket Earnings Call Summary

Earnings Call Date:Apr 23, 2025
(Q1-2025)
|
% Change Since: 25.34%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mix of positive and negative aspects. While there is notable growth in the Specialty Materials segment and significant investments to expand capacity, the Petroleum Additives segment faced declines in sales and operating profit. Improvements in net income, debt ratio, and shareholder returns are positive signs, but macroeconomic challenges remain a concern.
Q1-2025 Updates
Positive Updates
Increased Net Income
Net income for the first quarter of 2025 was $126 million or $13.26 per share, compared to $108 million or $11.23 per share for the first quarter of 2024.
Growth in Specialty Materials Segment
Specialty Materials sales were $54 million for Q1 2025, compared to $17 million for Q1 2024. The operating profit was $23 million for Q1 2025, compared to an operating loss of $5 million for Q1 2024.
Strategic Capital Investment
Planned capital investment of up to $100 million at the Ampac facility in Cedar City, Utah, to increase production capacity by more than 50%.
Improved Debt Ratio
Net debt to EBITDA ratio improved to 1.1 from 1.9 at the end of Q1 2024.
Shareholder Returns
Returned $83 million to shareholders through share repurchases of $57 million and dividends of $26 million.
Negative Updates
Decrease in Petroleum Additives Sales
Petroleum additive sales fell to $646 million for Q1 2025 from $677 million for the same period in 2024.
Decrease in Operating Profit for Petroleum Additives
Operating profit for Petroleum Additives decreased to $142 million from a record $151 million in Q1 2024 due to lower shipments.
Decline in Lubricant Additive Shipments
Lubricant additive shipments decreased in Asia Pacific and North America, with only slight increases in Europe and Latin America.
Challenges in Macroeconomic Environment
Ongoing macroeconomic challenges and uncertainty around international trade relations and tariffs pose concerns.
Company Guidance
During the first quarter of 2025, NewMarket Corporation reported a net income of $126 million, or $13.26 per share, up from $108 million, or $11.23 per share, in the same period of 2024. Petroleum additive sales decreased to $646 million from $677 million in the previous year, with operating profit down to $142 million from a record $151 million, primarily due to lower shipments. The company emphasized operational efficiency to maintain strong profit levels despite shipment declines. In contrast, the Specialty Materials segment saw significant growth, with sales rising to $54 million from $17 million and operating profit reaching $23 million, compared to a $5 million loss in the previous year. The company announced a $100 million capital investment to expand production at the Ampac facility in Utah, enhancing capacity for solid rocket motors. Throughout the quarter, NewMarket generated robust cash flows, returning $83 million to shareholders through share repurchases and dividends, and improved its net debt to EBITDA ratio to 1.1, down from 1.9 in Q1 2024. The corporation remains focused on long-term objectives, driven by core principles such as customer-focused solutions and technology-driven products.

Newmarket Financial Statement Overview

Summary
Newmarket demonstrates strong profitability with a consistent gross profit margin and a healthy revenue growth rate. The balance sheet is stable with manageable leverage and impressive ROE. Cash flow performance is solid, highlighting strong cash generation and operational efficiency. Overall, the financial profile is robust, supporting long-term financial health.
Income Statement
85
Very Positive
Newmarket demonstrates strong profitability with a consistent gross profit margin of around 32% and a net profit margin of approximately 17%. The company shows a healthy revenue growth rate of 3.4% in the TTM period compared to the previous year. The EBIT and EBITDA margins are robust, indicating efficient operations and cost management. Overall, the income statement reflects a stable and growing financial performance.
Balance Sheet
78
Positive
The balance sheet is relatively strong, with a debt-to-equity ratio of 0.70, indicating manageable leverage. Return on Equity (ROE) is impressive at 31.6%, reflecting efficient use of equity. The equity ratio stands at 47%, showcasing a balanced capital structure with a significant equity buffer. While overall stability is evident, continuous monitoring of debt levels is advisable to maintain financial health.
Cash Flow
80
Positive
Cash flow performance is solid, with a free cash flow growth rate of 3.9% in the TTM period, highlighting strong cash generation. The operating cash flow to net income ratio is 1.12, indicating good cash conversion from earnings. The free cash flow to net income ratio of 1.00 further supports the company's ability to generate cash relative to its earnings. This cash flow strength reinforces the company's operational efficiency.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue2.79B2.70B2.76B2.36B2.01B
Gross Profit886.35M772.51M640.50M547.71M595.03M
EBITDA758.43M604.33M465.22M401.09M441.62M
Net Income462.41M388.86M279.54M190.91M270.57M
Balance Sheet
Total Assets3.13B2.31B2.41B2.56B1.93B
Cash, Cash Equivalents and Short-Term Investments77.48M111.94M68.71M459.22M125.17M
Total Debt1.06B733.60M1.07B1.21B660.58M
Total Liabilities1.67B1.23B1.64B1.80B1.17B
Stockholders Equity1.46B1.08B762.41M762.13M759.82M
Cash Flow
Free Cash Flow462.27M528.53M59.15M86.40M190.84M
Operating Cash Flow519.59M576.82M115.32M165.34M284.15M
Investing Cash Flow-738.80M-48.29M315.89M-461.41M-74.24M
Financing Cash Flow185.81M-487.59M-439.36M255.13M-231.46M

Newmarket Technical Analysis

Technical Analysis Sentiment
Positive
Last Price718.94
Price Trends
50DMA
676.18
Positive
100DMA
620.64
Positive
200DMA
571.50
Positive
Market Momentum
MACD
15.56
Positive
RSI
57.60
Neutral
STOCH
17.37
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NEU, the sentiment is Positive. The current price of 718.94 is below the 20-day moving average (MA) of 721.60, above the 50-day MA of 676.18, and above the 200-day MA of 571.50, indicating a neutral trend. The MACD of 15.56 indicates Positive momentum. The RSI at 57.60 is Neutral, neither overbought nor oversold. The STOCH value of 17.37 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NEU.

Newmarket Risk Analysis

Newmarket disclosed 21 risk factors in its most recent earnings report. Newmarket reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Newmarket Peers Comparison

Overall Rating
UnderperformOutperform
Sector (44)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
$6.45B14.4523.59%0.96%82.78%
75
Outperform
$6.78B14.4335.85%1.46%3.65%20.92%
73
Outperform
$4.91B36.0711.94%0.58%3.76%18.06%
73
Outperform
$5.87B20.5311.75%1.35%6.08%117.61%
72
Outperform
$4.20B10.1130.57%2.78%-0.05%-2.76%
55
Neutral
$9.27B-10.58%1.92%-39.34%-500.52%
44
Neutral
C$980.54M-6.82-13.68%1.81%17.37%-32.98%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
NEU
Newmarket
718.94
167.44
30.36%
ALB
Albemarle
84.18
-6.72
-7.39%
BCPC
Balchem
149.20
-30.64
-17.04%
CBT
Cabot
75.47
-20.39
-21.27%
ESI
Element Solutions
23.69
-2.90
-10.91%
AXTA
Axalta Coating Systems
29.51
-5.36
-15.37%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 03, 2025