Stepan Company (96S) AI Stock Analysis

Stepan Company

(Frankfurt:96S)

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Positive Factors

Broad-based volume growthGrowth across all three segments indicates improving demand is not dependent on a single product line. Stronger volumes, especially in surfactants and North American polymers, can support better asset utilization, customer retention, and more durable earnings recovery over the next several quarters.

Negative Factors

Margin and earnings deteriorationThe sharp decline in profitability shows that revenue growth has not yet translated consistently into earnings power. Persistently lower margins could constrain reinvestment and shareholder returns, while the slightly negative TTM net income makes the recovery dependent on successful pricing, mix, and cost actions.

Stepan Company (96S) vs. iShares MSCI Germany ETF (EWG)

Market Cap: EUR 1.60B
Dividend Yield: 2.22%
Average Volume (3M): 300
Price to Earnings (P/E): 370.0
Beta (1Y): 0.75
Revenue Growth: 4.62%
EPS Growth: -90.10%
Country: Germany
Employees: 2,328
Sector: Basic Materials
Sector Strength: 61
Industry: Chemicals - Specialty

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 international...

Stepan Company Earnings Call Summary

Earnings Call Date:Oct 27, 2026(Q3-2026)|% Change Since:6.96%|Next Earnings Date:Feb 17, 2027

Earnings Call SentimentPositive

The call was strongly positive overall. Highlights significantly outweighed the challenges, with broad-based volume and earnings growth, higher margins, savings ahead of plan, improved leverage, positive free cash flow, customer expansion, and a positive full-year outlook. The main negatives were raw material and geopolitical volatility, working capital usage, restructuring and maintenance costs, weaker European and Asian demand, lower crop productivity demand, and expected moderation in fourth-quarter volume growth.

Positive Updates

Broad-Based Earnings Growth

All three segments delivered organic volume growth and increased earnings versus the prior year. Adjusted EBITDA was $66.3 million, up $10.1 million or 18%, while adjusted net income was $21.7 million, or $0.94 per diluted share, up 98% from $10.9 million or $0.48 per diluted share.

Negative Updates

Raw Material and Geopolitical Volatility

Raw material costs continued to increase in a volatile environment, with additional volatility in fixed costs and supply chains related to the Middle East conflict. Management said some pricing adjustments were still being made and that future results would depend on raw material prices.

Company Guidance

For 2026, Stepan expects to exceed the 60% 2-year $100 million pretax savings target, with Project Catalyst savings in the $66 million to $70 million range, versus a $23 million run rate in Q3; for 2027, it expects to be ahead of $25 million on average, with savings ahead of $25 million in the second half and slightly below $25 million in the first half. The company expects lower growth in Q4, and its fixed cost base is roughly $800 million, with normal inflation of 2%-3% on that base. Pasadena utilization is in the 75%-80% range, with more tolling savings expected in the second half than the first half of next year. For 2026, the company expects full year adjusted EBITDA growth, positive free cash flow, and continued deleveraging of the balance sheet.

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.

Production - Risks related to the company’s ability to manufacture goods and services

Latest Risks Added

0 New Risks

Stepan Company Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

DE:96S against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IOSP	69Neutral	$2.46B	20.27	9.15%	1.80%	2.87%	534.76%
FUL	68Neutral	$2.68B	14.16	9.51%	1.88%	1.48%	72.33%
ESI	62Neutral	$8.31B	40.39	7.39%	0.94%	39.62%	-14.83%
Sector *	61Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
KWR	60Neutral	$2.60B	26.34	7.02%	1.39%	8.68%	―
ASH	56Neutral	$3.42B	65.08	2.77%	2.25%	-1.39%	―

* Basic Materials Sector Average

Performance Comparison

DE:96S and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
DE:96S	Stepan Company	61.50	26.00	73.22%
ASH	Ashland Global Holdings, Inc.	74.19	24.83	50.31%
FUL	H.B. Fuller Company	51.56	-5.22	-9.19%
IOSP	Innospec	99.55	26.43	36.15%
KWR	Quaker Chemical	148.05	15.21	11.45%
ESI	Element Solutions	34.14	7.39	27.61%

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.

Stepan Company AI Stock Analysis