Stepan Company (SCL)
NYSE:SCL
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Stepan Company
(NYSE:SCL)
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Rating:58Neutral
Price Target:
$55.00
▲(21.12% Upside)
Action:Reiterated
Date:05/09/26
The score is held back primarily by weakened profitability and inconsistent/low free cash flow despite strong recent revenue growth and a healthier leverage profile. Technical indicators are moderately positive, while valuation is mixed (supported dividend but loss-driven negative P/E). Guidance and strategic actions (Project Catalyst savings and Pasadena ramp) provide a constructive path to recovery, but near-term margin and cash flow execution remain key risks.
Positive Factors
Project Catalyst cost savings
A committed $100M pretax, two-year cost program materially reshapes Stepan’s cost base. If executed, it should sustainably lower structural manufacturing costs, improve margins, and accelerate deleveraging and cash generation, reducing earnings volatility from commodity cycles.
Negative Factors
Profitability deterioration
Despite top-line recovery, margins and net income have weakened materially, reflecting cost pass-through shortfalls and adverse mix. Persistent margin compression threatens sustained earnings generation and undermines return on capital unless offset by structural cost reductions or sustained mix shift to higher-margin products.
Read all positive and negative factors
Positive Factors
Negative Factors
Project Catalyst cost savings
A committed $100M pretax, two-year cost program materially reshapes Stepan’s cost base. If executed, it should sustainably lower structural manufacturing costs, improve margins, and accelerate deleveraging and cash generation, reducing earnings volatility from commodity cycles.
Read all positive factors
Stepan Company (SCL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.15B
Dividend Yield3.33%
Average Volume (3M)171.84K
Price to Earnings (P/E)―
Beta (1Y)1.06
Revenue Growth5.46%
EPS Growth-125.23%
CountryUS
Employees2,396
SectorBasic Materials
Sector Strength58
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)-0.62
Shares Outstanding22,713,324
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 Cap1.50
Enterprise Value/Revenue0.74
Enterprise Value/Gross Profit6.65
Enterprise Value/Ebitda8.40
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)2.54
Revenue Forecast (FY)$2.51B
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:Apr 28, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 29, 2026
Earnings Call Sentiment Neutral
Balanced results: the company showed strong operational progress in strategic end markets (double-digit volume growth in several areas, polymers EBITDA growth, specialty product expansion), meaningful strategic actions (Project Catalyst, Pasadena ramp, asset sale) and maintained shareholder returns and deleveraging momentum. Offsetting these positives were material near-term earnings and margin pressures driven by a large restructuring charge, surfactants margin impacts (lower absorption, production timing, oleochemical cost pass-through), a 14% decline in adjusted EBITDA and negative free cash flow in the quarter. Management characterized several headwinds as timing or one-time items and expects recovery across the year, while also emphasizing ongoing macro and supply risks.Positive Updates
Safety Performance
Delivered the strongest safety performance on record in Q1 2026, highlighted as foundational to operations and execution.
Negative Updates
Reported Net Loss Driven by Restructuring Charge
Reported net loss of $41.4 million ($1.81 per diluted share) in Q1 2026 versus reported net income of $19.7 million ($0.86 per diluted share) a year ago, which includes a $65.4 million pretax ($51.2 million after-tax) restructuring charge related to site closures and decommissioning.
Read all updates
Q1-2026 Updates
Positive
Negative
Safety Performance
Delivered the strongest safety performance on record in Q1 2026, highlighted as foundational to operations and execution.
Read all positive updates
Company Guidance
Stepan reiterated that Project Catalyst is expected to deliver roughly $100 million of pretax savings over the next two years (with about 60% of the savings in 2026 and the bulk of the ramp beginning in Q2) and that it is on track to deliver the committed 2026 savings; the Pasadena, TX plant is expected to average ~80% utilization in 2026 and reach full utilization in 2027 (driving supply‑chain savings and future volume growth). Management guided to adjusted EBITDA growth, positive free cash flow and deleveraging of the balance sheet in 2026, with 2026 capital expenditures targeted at about $105–115 million (Q1 CapEx was $31 million); Q1 cash from operations was $17 million and free cash flow was negative $14 million, net debt was $511 million with a 2.7x leverage ratio, the company expects to close a $30 million Millsdale land sale in fall 2026, and it declared a quarterly cash dividend of $0.395 per share (Q1 dividends paid were $8.9 million).Stepan Company Financial Statement Overview
Summary
Income Statement
52
Neutral
Balance Sheet
70
Positive
Cash Flow
41
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.34B | 2.33B | 2.18B | 2.33B | 2.77B | 2.35B |
| Gross Profit | 259.28M | 269.89M | 272.21M | 277.60M | 427.07M | 395.81M |
| EBITDA | 205.22M | 212.17M | 192.10M | 169.68M | 294.24M | 270.42M |
| Net Income | -14.22M | 46.90M | 50.37M | 40.20M | 147.15M | 137.80M |
Balance Sheet | ||||||
| Total Assets | 2.33B | 2.36B | 2.30B | 2.36B | 2.43B | 2.07B |
| Cash, Cash Equivalents and Short-Term Investments | 140.78M | 132.69M | 99.67M | 129.82M | 173.75M | 159.19M |
| Total Debt | 713.08M | 691.04M | 682.83M | 712.17M | 637.70M | 420.25M |
| Total Liabilities | 1.14B | 1.11B | 1.13B | 1.15B | 1.27B | 991.42M |
| Stockholders Equity | 1.19B | 1.24B | 1.17B | 1.22B | 1.17B | 1.07B |
Cash Flow | ||||||
| Free Cash Flow | -19.26M | 25.37M | 39.28M | -85.46M | -140.79M | -122.35M |
| Operating Cash Flow | 157.87M | 147.88M | 162.05M | 174.88M | 160.76M | 72.14M |
| Investing Cash Flow | -85.55M | -89.05M | -116.94M | -258.67M | -308.09M | -376.83M |
| Financing Cash Flow | -44.60M | -35.44M | -64.52M | 33.28M | 166.21M | 117.33M |
Stepan Company Technical Analysis
Negative
45.41
Price Trends
49.93
Negative
52.18
Negative
49.27
Positive
Market Momentum
-0.23
Positive
43.54
Neutral
14.58
Positive
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 51.04, below the 50-day MA of 49.93, and below the 200-day MA of 49.27, indicating a neutral trend. The MACD of -0.23 indicates Positive momentum. The RSI at 43.54 is Neutral, neither overbought nor oversold. The STOCH value of 14.58 is Positive, 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 0 New Risks
Stepan Company Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $1.94B | 14.88 | 8.54% | 2.19% | 0.25% | 325.27% | |
76 Outperform | $993.19M | 15.57 | 19.73% | 1.41% | 2.92% | 16.50% | |
76 Outperform | $1.66B | 6.38 | 14.68% | ― | 1.35% | 51.46% | |
70 Outperform | $2.36B | 14.58 | 9.55% | 0.74% | 2.50% | ― | |
64 Neutral | $1.53B | 82.49 | -10.20% | ― | 16.03% | -470.74% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
58 Neutral | $1.15B | -6.91 | -1.15% | 3.33% | 5.46% | -125.23% |
* Basic Materials Sector Average
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Stepan Company Corporate Events
Executive/Board ChangesShareholder Meetings
Stepan Stockholders Back Directors, Pay and Auditor Choices
Positive
Apr 30, 2026
At its April 28, 2026, Annual Meeting of Stockholders, Stepan Company reported that 19,939,848 shares were represented in person or by proxy, constituting a quorum for votes on director elections, executive compensation and auditor ratification. S...
Business Operations and StrategyDividendsFinancial Disclosures
Stepan Declares Dividend Amid Restructuring-Driven Quarterly Loss
Negative
Apr 28, 2026
On April 28, 2026, Stepan’s board declared a quarterly cash dividend of $0.395 per share, payable June 15, 2026, to shareholders of record on June 1, 2026, underscoring its intent to maintain shareholder returns despite near‑term earni...
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.