Stepan (SCL): Exploring Undervaluation in Light of Analysts’ Earnings Growth Forecasts

Stepan (NYSE:SCL) has been catching attention as analysts point to its price-to-earnings ratio being below the industry average. This, combined with forecasts calling for a 32% earnings jump next year, is causing investor interest to pick up.

See our latest analysis for Stepan.

Stepan’s share price has been relatively subdued this year, and the stock’s muted momentum stands out given the upbeat earnings outlook and valuation discount. While its 1-year total shareholder return remains negative, expectations for a profit rebound suggest investors are beginning to recalibrate their stance on risk and future growth potential.

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The question now is whether Stepan’s low valuation and strong growth outlook point to a true bargain, or if the market has already factored these positives into its price, leaving limited room for upside.

Most Popular Narrative: 40.2% Undervalued

With Stepan’s fair value estimate set at $82.21 versus a recent close of $49.13, there is a significant gap between narrative-based and market pricing. This narrative positions Stepan as offering notable upside if its growth thesis plays out.

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.

Wondering exactly how this catalyst could transform Stepan’s fortunes? The full narrative highlights potential shifts in earnings power, margin recovery, and an aggressive profit ramp that is uncommon for this sector. Curious about the surprising financial forecasts fueling this valuation target? See what numbers could move the needle.

Result: Fair Value of $82.21 (UNDERVALUED)

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

However, persistent macroeconomic uncertainties or ongoing cash flow pressures could challenge Stepan’s growth rebound and limit the anticipated margin improvements.

Find out about the key risks to this Stepan narrative.

Build Your Own Stepan Narrative

If you see the story differently or want to put your research to the test, you can craft your personal narrative in just a few minutes. Do it your way

A great starting point for your Stepan research is our analysis highlighting 4 key rewards and 3 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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