Assessing Stepan’s Valuation After Q3 Earnings and Dividend Increase

Stepan (SCL) has announced its third-quarter earnings, reporting higher sales but a drop in net income compared to a year ago. At the same time, the company is raising its quarterly dividend by 2.6%.

See our latest analysis for Stepan.

After a tough stretch, Stepan’s latest earnings and dividend bump drew a bit of positive attention, but momentum has yet to turn. While the share price climbed 1.14% in the last day, the 1-year total shareholder return stands at a disappointing -40.26%. Short-term pops aside, a long-term turnaround would require convincing evidence that both profits and sentiment can shift gears meaningfully.

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With shares still well below prior highs and trading at a substantial discount to estimated intrinsic value, the real question is whether this downturn creates a rare buying window or if markets are already bracing for muted growth ahead.

Most Popular Narrative: 45.9% Undervalued

Compared to the recent close of $44.47, the most followed narrative suggests Stepan’s fair value is dramatically higher. This sharp gap stands out even among the sector’s typically cyclical stories.

The startup of the new Pasadena, Texas site is expected to reach full contribution in the second half of 2025, which could boost volume growth and supply chain savings. This is likely to impact revenue and margins positively.

Read the complete narrative.

Want to see the model behind this outlook? The narrative’s valuation brings together ambitious assumptions on growth rates, margin expansion, and future multiples for Stepan. Ready to uncover the major drivers powering such a bold price target? See what’s fueling this calculated optimism.

Result: Fair Value of $82.21 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent high interest rates and ongoing macroeconomic uncertainties could undermine revenue growth and margin recovery if conditions do not improve.

Find out about the key risks to this Stepan narrative.

Build Your Own Stepan Narrative

If you want to dive into the numbers and shape your own view, it’s quick and simple to create a personal narrative that reflects your outlook. Do it your way

A great starting point for your Stepan research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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