Newmarket (NEU) AI Stock Analysis

Compare

103 Followers

Top Page

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)

Market Cap

$6.78B

Dividend Yield1.46%

Average Volume (3M)141.36K

Price to Earnings (P/E)14.4

Beta (1Y)0.55

Revenue Growth3.65%

EPS Growth20.92%

CountryUS

Employees2,060

SectorBasic Materials

Sector Strength73

IndustryChemicals - Specialty

Share Statistics

EPS (TTM)13.26

Shares Outstanding9,434,506

10 Day Avg. Volume69,285

30 Day Avg. Volume141,363

Financial Highlights & Ratios

PEG Ratio3.39

Price to Book (P/B)4.51

Price to Sales (P/S)0.00

P/FCF Ratio14.24

Enterprise Value/Market Cap1.15

Enterprise Value/Revenue0.70

Enterprise Value/Gross Profit8.60

Enterprise Value/Ebitda2.67

Forecast

1Y Price Target

$761.00

Price Target Upside5.85% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering0

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

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

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

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.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.79B	2.70B	2.76B	2.36B	2.01B
Gross Profit	886.35M	772.51M	640.50M	547.71M	595.03M
EBITDA	758.43M	604.33M	465.22M	401.09M	441.62M
Net Income	462.41M	388.86M	279.54M	190.91M	270.57M
Balance Sheet
Total Assets	3.13B	2.31B	2.41B	2.56B	1.93B
Cash, Cash Equivalents and Short-Term Investments	77.48M	111.94M	68.71M	459.22M	125.17M
Total Debt	1.06B	733.60M	1.07B	1.21B	660.58M
Total Liabilities	1.67B	1.23B	1.64B	1.80B	1.17B
Stockholders Equity	1.46B	1.08B	762.41M	762.13M	759.82M
Cash Flow
Free Cash Flow	462.27M	528.53M	59.15M	86.40M	190.84M
Operating Cash Flow	519.59M	576.82M	115.32M	165.34M	284.15M
Investing Cash Flow	-738.80M	-48.29M	315.89M	-461.41M	-74.24M
Financing Cash Flow	185.81M	-487.59M	-439.36M	255.13M	-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
AXTA	76 Outperform	$6.45B	14.45	23.59%	―	0.96%	82.78%
NEU	75 Outperform	$6.78B	14.43	35.85%	1.46%	3.65%	20.92%
BCPC	73 Outperform	$4.91B	36.07	11.94%	0.58%	3.76%	18.06%
ESI	73 Outperform	$5.87B	20.53	11.75%	1.35%	6.08%	117.61%
CBT	72 Outperform	$4.20B	10.11	30.57%	2.78%	-0.05%	-2.76%
ALB	55 Neutral	$9.27B	―	-10.58%	1.92%	-39.34%	-500.52%
Sector *	44 Neutral	C$980.54M	-6.82	-13.68%	1.81%	17.37%	-32.98%

* Basic Materials Sector Average

Performance Comparison

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