Stepan Company (SCL)
NYSE:SCL
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Stepan Company
(NYSE:SCL)
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Rating:61Neutral
Price Target:
$47.00
▲(3.50% Upside)
Action:ReiteratedDate:02/27/26
SCL scores 61 mainly due to improving financial stability (lower leverage) and a 2025 free-cash-flow rebound, supported by earnings-call guidance tied to Project Catalyst savings and expected 2026 EBITDA growth. The score is held back by still-depressed profitability/returns and weak technicals (below short-term moving averages with oversold momentum), while valuation looks only moderately attractive given a high P/E despite a solid dividend yield.
Positive Factors
Improved leverage and balance-sheet health
Stepan’s materially stronger capital structure (debt-to-equity ~0.27; net debt down year‑over‑year) reduces refinancing and solvency risk, preserves financial flexibility for capex and restructuring, and supports continued dividend payments while funding strategic investments over the medium term.
Negative Factors
Compressed profitability and weak returns
Profitability remains depressed versus historical norms, with low net margins and weak ROE constraining internal reinvestment and long‑term return generation. Until margins recover sustainably, capital allocation choices and shareholder returns will be limited despite better leverage.
Read all positive and negative factors
Positive Factors
Negative Factors
Improved leverage and balance-sheet health
Stepan’s materially stronger capital structure (debt-to-equity ~0.27; net debt down year‑over‑year) reduces refinancing and solvency risk, preserves financial flexibility for capex and restructuring, and supports continued dividend payments while funding strategic investments over the medium term.
Read all positive factors
Stepan Company (SCL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.12B
Dividend Yield3.33%
Average Volume (3M)171.84K
Price to Earnings (P/E)23.1
Beta (1Y)1.07
Revenue Growth5.35%
EPS Growth-1.43%
CountryUS
Employees2,396
SectorBasic Materials
Sector Strength58
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)-0.02
Shares Outstanding22,635,277
10 Day Avg. Volume209,906
30 Day Avg. Volume171,843
Financial Highlights & Ratios
PEG Ratio-3.19
Price to Book (P/B)0.87
Price to Sales (P/S)0.46
P/FCF Ratio42.70
Enterprise Value/Market Cap1.54
Enterprise Value/Revenue0.74
Enterprise Value/Gross Profit6.39
Enterprise Value/Ebitda8.46
Forecast
1Y Price Target
$75.00Price Target Upside65.16% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)3.32
Revenue Forecast (FY)$2.47B
Stepan Company Business Overview & Revenue Model
Company Description
Stepan Company, together with its subsidiaries, produces and sells specialty and intermediate chemicals to other manufacturers for use in various end products. It operates through three segments: Surfactants, Polymers, and Specialty Products. The ...
How the Company Makes Money
Stepan makes money primarily by manufacturing and selling chemical products to business customers under its operating segments, with revenue generally recognized from product sales (typically per pound/ton or per formulated product shipment) and p...
Stepan Company Earnings Call Summary
Earnings Call Date:Feb 23, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 28, 2026
Earnings Call Sentiment Positive
The call conveyed a generally positive strategic and financial position: management delivered adjusted EBITDA growth for the full year, generated positive free cash flow, reduced net debt and leverage, commissioned the Pasadena facility, announced Project Catalyst with meaningful targeted savings, and achieved record safety results. Offsetting these positives were near-term pressures: Surfactants volume and margin weakness driven by oleochemical inflation and softer consumer/commodity demand, a modest Q4 EBITDA decline, tariff and macro uncertainty, planned site closures with community impacts, and a weather-driven estimated ~$6 million EBITDA hit in Q1 2026. Management expects catalyst savings, recovering raw material costs, and demand improvement to drive stronger performance in H2 2026.Positive Updates
Full-Year Adjusted EBITDA Growth
Adjusted EBITDA for fiscal 2025 increased 6% year-over-year to $199.0 million (EBITDA up 11% to $208.0 million), driven by disciplined pricing, cost management, favorable mix, and growth across strategic businesses.
Negative Updates
Q4 Adjusted EBITDA Decline
Consolidated adjusted EBITDA in Q4 2025 was $33.8 million, down ~3% versus prior-year Q4 ($35.0 million), primarily due to weaker Surfactants results and elevated raw material costs.
Read all updates
Q4-2025 Updates
Positive
Negative
Full-Year Adjusted EBITDA Growth
Adjusted EBITDA for fiscal 2025 increased 6% year-over-year to $199.0 million (EBITDA up 11% to $208.0 million), driven by disciplined pricing, cost management, favorable mix, and growth across strategic businesses.
Read all positive updates
Company Guidance
The company’s guidance centers on Project Catalyst, which is expected to deliver roughly $100 million of pretax savings over the next two years (about 60%, or ~$60M, realized in 2026) to help offset inflation on a roughly $750M fixed‑cost base (management cited ~3%+ cost inflation), while targeting adjusted EBITDA growth in 2026 versus FY2025 adjusted EBITDA of $199M and positive free cash flow; 2026 capital spending is guided to $105–115M (midpoint ~$110M). Operationally, Pasadena is expected to ramp to ~70–80% utilization in 2026 and full utilization in 2027, the company exited Fieldsboro and will decommission select Millsdale and Stalybridge assets, and management flagged a roughly $6M EBITDA hit in Q1 2026 from historic winter weather (with at least half expected to be recovered between Q2–Q4). Balance‑sheet and cash targets include ending 2025 net debt of $494M and a net leverage ratio of ~2.5x (down from 2.8x), while shareholder returns continue (2025 dividends paid $8.9M; quarterly dividend $0.395/share, a 2.6% increase).Stepan Company Financial Statement Overview
Summary
Income Statement
54
Neutral
Balance Sheet
72
Positive
Cash Flow
63
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.33B | 2.18B | 2.33B | 2.77B | 2.35B |
| Gross Profit | 269.89M | 272.21M | 277.60M | 427.07M | 395.81M |
| EBITDA | 208.02M | 192.10M | 169.68M | 294.24M | 270.42M |
| Net Income | 46.90M | 50.37M | 40.20M | 147.15M | 137.80M |
Balance Sheet | |||||
| Total Assets | 2.36B | 2.30B | 2.36B | 2.43B | 2.07B |
| Cash, Cash Equivalents and Short-Term Investments | 132.69M | 99.67M | 129.82M | 173.75M | 159.19M |
| Total Debt | 691.04M | 682.83M | 712.17M | 637.70M | 420.25M |
| Total Liabilities | 1.11B | 1.13B | 1.15B | 1.27B | 991.42M |
| Stockholders Equity | 1.24B | 1.17B | 1.22B | 1.17B | 1.07B |
Cash Flow | |||||
| Free Cash Flow | 25.37M | 39.28M | -85.46M | -140.79M | -122.35M |
| Operating Cash Flow | 147.88M | 162.05M | 174.88M | 160.76M | 72.14M |
| Investing Cash Flow | -89.05M | -116.94M | -258.67M | -308.09M | -376.83M |
| Financing Cash Flow | -35.44M | -64.52M | 33.28M | 166.21M | 117.33M |
Stepan Company Technical Analysis
Negative
45.41
Price Trends
53.69
Negative
50.34
Negative
49.81
Negative
Market Momentum
-0.59
Negative
47.35
Neutral
65.01
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SCL, the sentiment is Negative. The current price of 45.41 is below the 20-day moving average (MA) of 48.03, below the 50-day MA of 53.69, and below the 200-day MA of 49.81, indicating a neutral trend. The MACD of -0.59 indicates Negative momentum. The RSI at 47.35 is Neutral, neither overbought nor oversold. The STOCH value of 65.01 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SCL.
Stepan Company Risk Analysis
Stepan Company disclosed 21 risk factors in its most recent earnings report. Stepan Company 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 1 New Risks
1.
We may not realize the anticipated cost savings and/or operating efficiencies associated with strategic initiatives. Q4, 2025
Stepan Company Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $918.30M | 15.57 | 19.73% | 1.41% | 5.29% | 17.29% | |
76 Outperform | $1.51B | 13.54 | 14.68% | ― | -3.10% | -22.31% | |
73 Outperform | $1.81B | 16.33 | 9.01% | 2.19% | -4.49% | -100.80% | |
63 Neutral | $2.15B | 12.77 | -1.11% | 0.74% | -2.53% | -100.23% | |
63 Neutral | $1.44B | -15.78 | -10.93% | ― | 7.75% | -302.73% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
61 Neutral | $1.12B | 23.10 | 3.80% | 3.33% | 5.35% | -1.43% |
* Basic Materials Sector Average
SCL
Stepan Company
49.42
1.26
2.61%
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MTX
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ODC
Oil-Dri Of America
68.42
25.26
58.52%
REX
Rex American
45.87
26.85
141.17%
ECVT
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13.01
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Stepan Company Corporate Events
Business Operations and StrategyDividendsFinancial DisclosuresM&A Transactions
Stepan Company Reports Q4 2025 Results, Declares Dividend
Neutral
Feb 23, 2026
On February 23, 2026, Stepan Company reported fourth-quarter 2025 net income of $5.0 million, up 49% year over year, though adjusted net income swung to a $0.5 million loss as higher interest expense tied to the Pasadena, Texas start-up, a less fa...
Business Operations and Strategy
Stepan Launches Project Catalyst for Global Cost Efficiency
Negative
Feb 23, 2026
On February 20, 2026, Stepan Company’s board approved Project Catalyst, a two-year operational and efficiency program targeting about $100 million in pre-tax savings designed to optimize its global manufacturing footprint and support sustain...
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.