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Newmarket (NEU)
NYSE:NEU
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Newmarket
(NYSE:NEU)
Rating:78Outperform
Price Target:
$761.00
▲(19.80%Upside)
Newmarket (NEU) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.03B
Dividend Yield1.72%
Average Volume (3M)99.75K
Price to Earnings (P/E)12.7
Beta (1Y)0.49
Revenue Growth3.65%
EPS Growth20.92%
CountryUS
Employees2,060
SectorBasic Materials
Sector Strength68
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)13.26
Shares Outstanding9,434,506
10 Day Avg. Volume230,129
30 Day Avg. Volume99,747
Financial Highlights & Ratios
PEG Ratio0.20
Price to Book (P/B)4.09
Price to Sales (P/S)0.00
P/FCF Ratio52.78
Enterprise Value/Market Cap0.68
Enterprise Value/Revenue0.37
Enterprise Value/Gross Profit4.55
Enterprise Value/Ebitda1.41
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
Newmarket Business Overview & Revenue Model
Company DescriptionNewMarket Corporation, through its subsidiaries, engages in the petroleum additives business. The company offers lubricant additives for use in various vehicle and industrial applications, including engine oils, transmission fluids, off-road powertrain and hydraulic systems, gear oils, hydraulic oils, turbine oils, and other applications where metal-to-metal moving parts are utilized; engine oil additives designed for passenger cars, motorcycles, on and off-road heavy duty commercial equipment, locomotives, and engines in ocean-going vessels; driveline additives designed for products, such as transmission fluids, axle fluids, and off-road powertrain fluids; and industrial additives designed for products for industrial applications consisting of hydraulic fluids, grease, industrial gear fluids, and industrial specialty applications, such as turbine oils. It also provides fuel additives that are used to enhance the oil refining process and the performance of gasoline, diesel, biofuels, and other fuels to industry, government, original equipment manufacturers, and individual customers. In addition, the company engages in the antiknock compounds business, as well as contracted manufacturing and services activities; and owns and manages a real property in Virginia. It operates in North America, Latin America, the Asia Pacific, Europe, the Middle East, Africa, and India. NewMarket Corporation was founded in 1887 and is headquartered in Richmond, Virginia.
How the Company Makes MoneyNewmarket (NEU) generates revenue primarily through the sale of its software products and subscription-based services. The company offers tiered pricing models for its cloud-based solutions, allowing clients to choose packages that best suit their needs. Additionally, NEU partners with other technology firms to incorporate its analytics tools into broader enterprise solutions, earning revenue through licensing agreements and strategic partnerships. Consulting services and custom data solutions also contribute to NEU's earnings, as businesses seek tailored insights and expertise to leverage data effectively.
Newmarket Earnings Call Summary
Earnings Call Date:Apr 23, 2025
(Q1-2025)
| % Change Since: 10.75%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mix of positive and negative aspects. While there is notable growth in the Specialty Materials segment and significant investments to expand capacity, the Petroleum Additives segment faced declines in sales and operating profit. Improvements in net income, debt ratio, and shareholder returns are positive signs, but macroeconomic challenges remain a concern.Q1-2025 Updates
Positive Updates
Increased Net Income
Net income for the first quarter of 2025 was $126 million or $13.26 per share, compared to $108 million or $11.23 per share for the first quarter of 2024.
Growth in Specialty Materials Segment
Specialty Materials sales were $54 million for Q1 2025, compared to $17 million for Q1 2024. The operating profit was $23 million for Q1 2025, compared to an operating loss of $5 million for Q1 2024.
Strategic Capital Investment
Planned capital investment of up to $100 million at the Ampac facility in Cedar City, Utah, to increase production capacity by more than 50%.
Improved Debt Ratio
Net debt to EBITDA ratio improved to 1.1 from 1.9 at the end of Q1 2024.
Shareholder Returns
Returned $83 million to shareholders through share repurchases of $57 million and dividends of $26 million.
Negative Updates
Decrease in Petroleum Additives Sales
Petroleum additive sales fell to $646 million for Q1 2025 from $677 million for the same period in 2024.
Decrease in Operating Profit for Petroleum Additives
Operating profit for Petroleum Additives decreased to $142 million from a record $151 million in Q1 2024 due to lower shipments.
Decline in Lubricant Additive Shipments
Lubricant additive shipments decreased in Asia Pacific and North America, with only slight increases in Europe and Latin America.
Challenges in Macroeconomic Environment
Ongoing macroeconomic challenges and uncertainty around international trade relations and tariffs pose concerns.
Company Guidance
During the first quarter of 2025, NewMarket Corporation reported a net income of $126 million, or $13.26 per share, up from $108 million, or $11.23 per share, in the same period of 2024. Petroleum additive sales decreased to $646 million from $677 million in the previous year, with operating profit down to $142 million from a record $151 million, primarily due to lower shipments. The company emphasized operational efficiency to maintain strong profit levels despite shipment declines. In contrast, the Specialty Materials segment saw significant growth, with sales rising to $54 million from $17 million and operating profit reaching $23 million, compared to a $5 million loss in the previous year. The company announced a $100 million capital investment to expand production at the Ampac facility in Utah, enhancing capacity for solid rocket motors. Throughout the quarter, NewMarket generated robust cash flows, returning $83 million to shareholders through share repurchases and dividends, and improved its net debt to EBITDA ratio to 1.1, down from 1.9 in Q1 2024. The corporation remains focused on long-term objectives, driven by core principles such as customer-focused solutions and technology-driven products.Newmarket Financial Statement Overview
Summary
Newmarket shows strong financial performance with consistent revenue growth, robust profitability, and efficient cash generation. The balance sheet is stable, and the company effectively manages debt, positioning it well for future opportunities.Income Statement
Newmarket demonstrates strong profitability with a consistent gross profit margin of around 32% and a net profit margin of approximately 17%. The company shows a healthy revenue growth rate of 3.4% in the TTM period compared to the previous year. The EBIT and EBITDA margins are robust, indicating efficient operations and cost management. Overall, the income statement reflects a stable and growing financial performance.85
Very Positive
Balance Sheet
The balance sheet is relatively strong, with a debt-to-equity ratio of 0.70, indicating manageable leverage. Return on Equity (ROE) is impressive at 31.6%, reflecting efficient use of equity. The equity ratio stands at 47%, showcasing a balanced capital structure with a significant equity buffer. While overall stability is evident, continuous monitoring of debt levels is advisable to maintain financial health.78
Positive
Cash Flow
Cash flow performance is solid, with a free cash flow growth rate of 3.9% in the TTM period, highlighting strong cash generation. The operating cash flow to net income ratio is 1.12, indicating good cash conversion from earnings. The free cash flow to net income ratio of 1.00 further supports the company's ability to generate cash relative to its earnings. This cash flow strength reinforces the company's operational efficiency.80
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 2.79B | 2.79B | 2.70B | 2.76B | 2.36B | 2.01B | Gross Profit |
| 906.00M | 886.35M | 772.51M | 640.50M | 547.71M | 595.03M | EBIT |
| 609.11M | 590.04M | 483.05M | 355.14M | 257.78M | 311.80M | EBITDA |
| 782.87M | 758.43M | 604.33M | 465.22M | 401.09M | 441.62M | Net Income Common Stockholders |
| 480.63M | 462.41M | 388.86M | 279.54M | 190.91M | 270.57M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 118.25M | 77.48M | 111.94M | 68.71M | 459.22M | 125.17M | Total Assets |
| 3.23B | 3.13B | 2.31B | 2.41B | 2.56B | 1.93B | Total Debt |
| 1.06B | 1.06B | 733.60M | 1.07B | 1.21B | 660.58M | Net Debt |
| 946.71M | 981.57M | 621.66M | 997.56M | 1.12B | 535.41M | Total Liabilities |
| 1.71B | 1.67B | 1.23B | 1.64B | 1.80B | 1.17B | Stockholders Equity |
| 1.52B | 1.46B | 1.08B | 762.41M | 762.13M | 759.82M |
| Cash Flow | Free Cash Flow | ||||
| 480.30M | 462.27M | 528.53M | 59.15M | 86.40M | 190.84M | Operating Cash Flow |
| 537.07M | 519.59M | 576.82M | 115.32M | 165.34M | 284.15M | Investing Cash Flow |
| -54.33M | -738.80M | -48.29M | 315.89M | -461.41M | -74.24M | Financing Cash Flow |
| -484.05M | 185.81M | -487.59M | -439.36M | 255.13M | -231.46M |
Newmarket Technical Analysis
Neutral
635.23
Price Trends
614.23
Positive
574.09
Positive
550.73
Positive
Market Momentum
7.36
Positive
50.00
Neutral
35.95
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NEU, the sentiment is Neutral. The current price of 635.23 is below the 20-day moving average (MA) of 642.10, above the 50-day MA of 614.23, and above the 200-day MA of 550.73, indicating a neutral trend. The MACD of 7.36 indicates Positive momentum. The RSI at 50.00 is Neutral, neither overbought nor oversold. The STOCH value of 35.95 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NEU.
Newmarket Risk Analysis
Newmarket disclosed 21 risk factors in its most recent earnings report. Newmarket 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
Newmarket Peers Comparison
Overall Rating
UnderperformOutperform
Sector (51)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $6.03B | 12.72 | 35.85% | 1.72% | 3.65% | 20.92% | |
77 Outperform | $6.46B | 14.15 | 23.59% | ― | 0.96% | 82.78% | |
75 Outperform | $5.22B | 38.32 | 11.94% | 0.54% | 3.76% | 18.06% | |
75 Outperform | $5.23B | 18.29 | 11.75% | 1.48% | 6.08% | 117.61% | |
71 Outperform | $4.00B | 9.63 | 30.57% | 2.42% | -0.05% | -2.76% | |
56 Neutral | $7.17B | ― | -10.58% | 2.66% | -39.34% | -500.52% | |
51 Neutral | $2.03B | -1.27 | -21.09% | 4.14% | 2.90% | -30.49% |
* Basic Materials Sector Average
Performance Comparison
NEU
Newmarket
635.23
121.21
23.58%
ALB
Albemarle
59.69
-37.82
-38.79%
BCPC
Balchem
159.32
7.61
5.02%
CBT
Cabot
73.03
-22.78
-23.78%
ESI
Element Solutions
21.43
-6.07
-22.07%
AXTA
Axalta Coating Systems
28.90
-5.70
-16.47%
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.