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Stepan Company
(NYSE:SCL)
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Rating:62Neutral
Price Target:
$68.00
▲(18.12% Upside)
Action:Reiterated
Date:08/06/26
The score is anchored by weak recent profitability and uneven free cash flow despite a solid balance sheet, partially offset by strong technical momentum and a generally positive earnings-call outlook driven by Project Catalyst savings and ongoing deleveraging. Valuation is tempered by a negative P/E, while the dividend provides some support.
Positive Factors
Broad-based revenue and volume growth
Growth across major segments and end markets indicates improving customer demand rather than reliance on one product line. Sustained volume expansion can strengthen capacity utilization, customer relationships and operating leverage over the next several quarters.
Negative Factors
Severe profitability and margin deterioration
Compressed gross, EBIT and EBITDA margins show that recent revenue growth has not yet translated into durable earnings power. Persistent input-cost pressure, weaker pricing or unfavorable mix could limit the benefit of higher volumes until restructuring savings mature.
Read all positive and negative factors
Positive Factors
Negative Factors
Broad-based revenue and volume growth
Growth across major segments and end markets indicates improving customer demand rather than reliance on one product line. Sustained volume expansion can strengthen capacity utilization, customer relationships and operating leverage over the next several quarters.
Read all positive factors
Stepan Company (SCL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.45B
Dividend Yield2.47%
Average Volume (3M)132.34K
Price to Earnings (P/E)―
Beta (1Y)1.00
Revenue Growth7.63%
EPS Growth-104.57%
CountryUS
Employees2,328
SectorBasic Materials
Sector Strength58
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)-0.12
Shares Outstanding22,732,540
10 Day Avg. Volume83,844
30 Day Avg. Volume132,338
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 Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$85.00Price Target Upside47.65% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)2.69
Revenue Forecast (FY)$2.53B
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 in the United States, France, Poland, the United Kingdom, Brazil, Mexico, and internatio...
How the Company Makes Money
Stepan makes money primarily by manufacturing and selling chemical products to customers (largely B2B) across three main business segments: (1) Surfactants: revenue is generated from selling anionic, nonionic, cationic, and amphoteric surfactants ...
Stepan Company Earnings Call Summary
Earnings Call Date:Jul 29, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 21, 2026
Earnings Call Sentiment Positive
The call presented strong operational and financial performance: double-digit revenue growth, a 45% increase in adjusted EBITDA, and substantial improvements in adjusted earnings per share. Project Catalyst savings are ramping and balance sheet deleveraging is progressing. However, the quarter also included meaningful restructuring charges and a negative free cash flow impacted by a large working capital build and ongoing raw material volatility. Management signaled some portion of Q2 strength may reflect customer pre-buying ($5–$10 million of EBITDA) and flagged H2 maintenance and restructuring cash impacts. On balance, the positive drivers (broad-based volume growth, margin recovery, and on-track cost savings) outweigh the transitional challenges and one-time charges.Positive Updates
Strong EBITDA and Earnings Expansion
Adjusted EBITDA of $74.4 million, up 45% year-over-year. Adjusted net income of $27.1 million (adjusted EPS $1.18), up 126% versus prior year. Reported net income was $22.9 million or $1.00 per diluted share, up 102% year-over-year.
Negative Updates
Restructuring Charges and Workforce Reductions
Q2 included a $5.1 million pre-tax restructuring charge ($4.0 million after-tax) related to site closures and asset decommissioning. Company expects full-year restructuring charges in the range of $75–$80 million and announced plans to reduce ~100 salaried positions as part of Project Catalyst.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong EBITDA and Earnings Expansion
Adjusted EBITDA of $74.4 million, up 45% year-over-year. Adjusted net income of $27.1 million (adjusted EPS $1.18), up 126% versus prior year. Reported net income was $22.9 million or $1.00 per diluted share, up 102% year-over-year.
Read all positive updates
Company Guidance
Management's forward-looking guidance emphasized Project Catalyst and balance‑sheet improvement: Catalyst remains on track to deliver about $100M of pre‑tax savings over two years with ~60% (~$60M+) expected in 2026, a current savings run‑rate of ~$18–20M per quarter and a target of roughly $22M per quarter by year‑end; they reaffirm full‑year adjusted EBITDA growth, positive free cash flow and continued deleveraging (net debt $534M; net leverage 2.5x at Q2, down from 2.7x in Q1 and 2.9x a year ago). They expect full‑year restructuring charges of $75–80M (Q2 restructuring cash ~ $6M; ~100 salaried roles to be reduced in Q3), noted H2 polymer maintenance turnarounds of ~$4–5M, and cautioned that Q2 benefited from roughly $5–10M of EBITDA from customer pre‑buying; Q2 operating metrics cited were adjusted EBITDA $74.4M, adjusted net income $27.1M ($1.18 adj. EPS), net sales $684M, working capital build $58M, capex $23M and free cash flow of negative $15M.Stepan Company Financial Statement Overview
Summary
Income Statement
44
Neutral
Balance Sheet
63
Positive
Cash Flow
52
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.43B | 2.33B | 2.18B | 2.33B | 2.77B | 2.35B |
| Gross Profit | 287.37M | 269.89M | 272.21M | 277.60M | 427.07M | 395.81M |
| EBITDA | 159.55M | 212.17M | 192.10M | 169.68M | 294.24M | 270.42M |
| Net Income | -2.65M | 46.90M | 50.37M | 40.20M | 147.15M | 137.80M |
Balance Sheet | ||||||
| Total Assets | 2.39B | 2.36B | 2.30B | 2.36B | 2.43B | 2.07B |
| Cash, Cash Equivalents and Short-Term Investments | 113.70M | 132.69M | 99.67M | 129.82M | 173.75M | 159.19M |
| Total Debt | 707.35M | 691.04M | 682.83M | 712.17M | 637.70M | 420.25M |
| Total Liabilities | 1.18B | 1.11B | 1.13B | 1.15B | 1.27B | 991.42M |
| Stockholders Equity | 1.21B | 1.24B | 1.17B | 1.22B | 1.17B | 1.07B |
Cash Flow | ||||||
| Free Cash Flow | -33.85M | 25.37M | 39.28M | -85.46M | -140.79M | -122.35M |
| Operating Cash Flow | 171.98M | 147.88M | 162.05M | 174.88M | 160.76M | 72.14M |
| Investing Cash Flow | -106.81M | -89.05M | -116.94M | -258.67M | -308.09M | -376.83M |
| Financing Cash Flow | -33.90M | -35.44M | -64.52M | 33.28M | 166.21M | 117.33M |
Stepan Company Technical Analysis
Positive
57.57
Price Trends
58.92
Positive
54.95
Positive
52.24
Positive
Market Momentum
1.60
Positive
57.94
Neutral
15.86
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SCL, the sentiment is Positive. The current price of 57.57 is below the 20-day moving average (MA) of 63.51, below the 50-day MA of 58.92, and above the 200-day MA of 52.24, indicating a bullish trend. The MACD of 1.60 indicates Positive momentum. The RSI at 57.94 is Neutral, neither overbought nor oversold. The STOCH value of 15.86 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 | $2.31B | 18.92 | 9.15% | 2.11% | 2.87% | 534.76% | |
73 Outperform | $1.44B | 15.80 | 15.77% | ― | 2.95% | 73.25% | |
65 Neutral | $1.24B | 22.12 | 20.30% | 0.78% | 3.31% | 14.76% | |
62 Neutral | $1.45B | -530.58 | -0.22% | 2.73% | 7.63% | -104.57% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
56 Neutral | $2.22B | -32.32 | -4.04% | 0.62% | 4.06% | -3189.89% | |
56 Neutral | $1.14B | -19.12 | -10.33% | ― | 20.14% | -359.78% |
* Basic Materials Sector Average
SCL
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31.97%
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Stepan Company Corporate Events
Business Operations and StrategyExecutive/Board ChangesDividendsFinancial Disclosures
Stepan advances Project Catalyst restructuring and dividend plans
Positive
Jul 29, 2026
On July 28 and 29, 2026, Stepan’s board advanced its Project Catalyst efficiency program with a plan to cut about 100 global salaried roles in the third quarter, expecting $4 million to $6 million in related severance and benefits charges wi...
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.