NEWMARKET CORPORATION (NEU): what the price assumes
In the published model solve dated 2026-Q2, anchored at $914.69, NEWMARKET CORPORATION (NEU) is priced for +2.3% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-27.
Generated: 2026-08-31 · Source: https://boothcheck.com/report/NEU
Headline
| Field | Value |
|---|---|
| Ticker | NEU |
| Company | NEWMARKET CORPORATION |
| Current price | $914.69/sh |
| Composition | Lubricant additives 79% / Fuel additives 14% / Specialty materials 7% / All other 0% |
What The Price Assumes (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin (value-band context) | 11.4% |
| Operating margin today | 20.0% |
| Margin compression (value-band) | -8.6pp |
| Implied growth | 2.3% |
| Multiple paid | 17x operating income |
The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.
Solve inputs: computed at a 7.9% cost of capital with 4% terminal growth over a 5-year stage.
How unusual the bet is: within-range (limited comparison data)
| Reference | Value |
|---|---|
| vs own history | -0.35σ |
| cohort percentile (of 78 peers) | 45 |
Valuation X-Ray
Every valuation family lands below the price. The price therefore sits beyond what those standard frames encode.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.80x | 5 | expensive |
| Earnings | 2.05x | 3 | expensive |
| Relative | — | 0 | — |
| Growth | 1.43x | 3 | expensive |
Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.4%); the inversion above states its own rate.
Per-Model Detail (n=11)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $515.84 | 1.77x | yes | FCF base $0.4B, growth -1% (input: historical growth), terminal g 0.5%, WACC 8.4%, 5yr projection |
| DCF Exit Multiple | Growth | $934.18 | 0.98x | yes | Exit EV/EBITDA: 11.7x / 13.7x / 15.7x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | — | — | no | P/E 14x (static sector reference · 2026-04), scenarios: 11.8x / 14.0x / 16.2x (bear / base = reference held flat / bull), EV/EBITDA 9.71x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $509.45 | 1.80x | yes | BV/sh $199.90, ROE (TTM) 23.6%, ke 9.3% |
| Two-Stage Excess Return | Asset | $812.97 | 1.13x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $637.70 | 1.43x | yes | Rev $2.7B, growth -1% (input: historical growth; tapered), Terminal P/S: 2.6x / 3.1x / 3.5x (bear / base = today's held flat / bull, cap 8x) |
| Growth-Adjusted P/E | Relative | — | — | no | — |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $445.93 | 2.05x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.48B × (1−21%) / WACC 8.4% → EPV (no growth) |
| Residual Income | Asset | $744.33 | 1.23x | yes | BV $199.90 + 5yr PV of (ROE (TTM) 23.6% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $457.32 | 2.00x | yes | √(22.5 × EPS $46.50 × BVPS $199.90) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | — | — | no | EBITDA $0.68B × sector EV/EBITDA 8.0x |
| FCF Yield | Earnings | $401.54 | 2.28x | yes | FCF $419.9M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | — | — | no | — |
| Ben Graham Formula | Earnings | $38.97 | 23.47x | yes | EPS $46.50 × (8.5 + 2×-5.0%) × (4.4 / 5.3%) (excluded from median) |
| ROIC-Justified P/B | Asset | $113.99 | 8.02x | yes | BV $199.90 × (ROIC 4.8% / WACC 8.4%) |
| P/Sales Sector | Relative | — | — | no | Revenue $2.74B × sector P/S 1.5x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | $502.70 | 1.82x | yes | EPS $46.50 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Economic-Unit Decomposition (Sum Of The Parts)
One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.
| Unit | Role | Valuation basis | Revenue | Reported profit | Value evidence | Status |
|---|---|---|---|---|---|---|
| Petroleum additives | operating | enterprise | $2.5b | $520.1m operating-income | withheld | unresolved no unit value |
| Specialty materials | operating | enterprise | $182.5m | $47.0m operating-income | withheld | unresolved no unit value |
No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.
Solvency
| Field | Value |
|---|---|
| Net debt | $779.4m |
| Net debt / NOPAT (after-tax) | 1.81x |
| Net debt / operating income (pre-tax) | 1.42x |
| Interest coverage | 15.3x |
| Share count CAGR (buyback) | -2.5% |
| Burning cash | no |
Bullet Takeaways
The single most decisive metric for NewMarket is the durability of its petroleum-additives margin, because the whole verdict turns on it. The company earns a roughly 20% operating margin in a concentrated additives industry, and at $780.84 (June 27, 2026) the price pays only about 14x company-wide operating income, low enough that it implies operating profit actually declines about 3.4% per year for five years.
That low implied bar is the crux: if the additives franchise merely holds its margin rather than shrinking, the price looks conservative. The static valuation families all read richly valued on the surface, yet the inversion classifies the priced-in assumption as within range precisely because the price asks for so little.
The balance sheet is solid: net debt of about $885 million, roughly 1.7x operating income, with interest coverage near 14x. NewMarket is a steady, cash-generative holding company (Afton, Ethyl, AMPAC) priced for stagnation, where the question is whether the additives moat is as durable as its history suggests.
Bull Case
The one number that decides NewMarket is whether its petroleum-additives operating margin, around 20%, is durable, because the price is paying so little for it that even flat performance flips the verdict in the bull's favor. At about 14x operating income the price implies operating profit declining roughly 3.4% per year for five years. That is a remarkably low bar for a business with NewMarket's economics: if the additives franchise simply holds, the stock is undervalued by the price's own logic, and any growth at all is upside the market is not paying for.
The durability case rests on the structure of the additives industry. Lubricant and fuel additives are a concentrated business dominated by a handful of global players, and the products are technically demanding, formulated to reduce friction, prevent wear, control sludge and oxidation, and prevent rust, and sold to lubricant manufacturers who blend them to meet strict industry and OEM specifications (FY2025 10-K, accession 0001282637-26-000005). Switching an additive supplier means requalifying formulations against those specifications, which makes the customer relationships sticky and the pricing rational. That is why NewMarket has historically earned high, stable returns on capital and converted them into consistent cash and aggressive shareholder returns.
The portfolio is also gaining a growth leg outside the mature core. The AMPAC specialty-materials segment, which makes ingredients for solid rocket motors used in aerospace and defense, grew in the most recent quarter, helped by the Calca Solutions business acquired in October 2025, with specialty materials sales rising to $58.1 million from $53.7 million. Defense-linked specialty materials are a higher-growth, strategically important market, and they diversify NewMarket beyond the cyclicality of engine-oil demand. With net cash generation strong, interest coverage near 14x, and the price implying decline, the bull case is simply that a durable, well-run additives oligopoly with a growing defense-materials arm is priced as if it will slowly fade, and it has shown no sign of doing so.
Bear Case
The qualitative observation that should worry a NewMarket holder is that the core business just shrank, and a low multiple on a shrinking business is not the bargain it appears to be. The most recent quarter showed net income falling to $118.1 million, or $12.62 per share, from $125.9 million, or $13.26, a year earlier, and the petroleum-additives segment, which is roughly four-fifths of the company, saw sales drop to $609.8 million from $645.6 million on a 7% decline in shipments driven by softness in lubricant additives. The price implies a gentle 3.4% annual decline, but the latest data shows the decline already underway. The question the bear poses is whether that softness is a blip or the leading edge of a structural fade.
The structural concern behind the numbers is the long-term direction of the end market. Engine-oil-additive demand is tied to the global vehicle fleet, miles driven, and oil-change intervals, and the slow shift toward electric vehicles, which do not need engine-oil additives, is a genuine multi-decade headwind for the largest part of the business. The price already reflects modest erosion, but if the EV transition or extended drain intervals accelerate the decline beyond the implied 3.4%, the additives franchise becomes a melting ice cube rather than a stable annuity, and the 14x multiple would prove too high, not too low.
The valuation evidence supports caution. On the family view, no standard frame reaches the price: the asset, earnings-power, peer-multiple, and even growth methods all read the stock as richly valued relative to a steady-state business, which is the methods registering that the recent results and the secular outlook do not comfortably support the quote. Net debt of about $885 million is manageable but not trivial against a business whose core is contracting. The bear case is not a collapse, NewMarket is profitable and well capitalized, it is that the market is treating a structurally challenged cash cow as a stable one, and the recent shipment decline is the early evidence that the gentle fade the price assumes may not stay gentle.
Valuation
At the current price the market is paying about 14x company-wide operating income, which implies operating growth of roughly negative 3.4% per year over a five-year stage. The solve runs at a cost of capital near 7.8% with 4% terminal growth, and each point of cost of capital moves the implied growth by about 6.3 points. Keep the figure approximate; it is a single inversion. The key point is that the price embeds a slow decline, not growth, which is an unusual thing for the market to pay even 14x for.
The family pattern is worth reading carefully. On the surface, no valuation family reaches the price, all of them, asset, earnings-power, peer-multiple, and growth, read richly valued, yet the inversion classifies the priced-in assumption as within range. The reconciliation is that the static methods are anchored to a steady-state business while the price is paying for a mild decline, so the labels reflect different reference points. The reverse-DCF range centers well above the current price with an acceptable reliability flag, which says that if the business merely holds flat rather than declining, fair value is materially higher.
The judgment is therefore a single question: is NewMarket's additives margin durable or fading? If durable, the price implying a 3.4% annual decline is too pessimistic, and the stock is cheap with the AMPAC defense-materials arm as free upside. If the EV transition and demand softness drive a steeper decline, the same 14x multiple sits on a shrinking earnings base and is not cheap at all. The recent 7% shipment drop is the data point that keeps the question open, and it is why the valuation is best read as a bet on the durability of a mature franchise rather than as an obvious value.
Catalysts
The most recent print, Q1 2026 (reported April 2026), showed net income of $118.1 million, or $12.62 per share, down from $125.9 million, or $13.26, a year earlier. The petroleum-additives segment, the bulk of the company, saw sales decline to $609.8 million from $645.6 million on a 7% drop in shipments tied to market softness, mainly in lubricant additives. The specialty-materials (AMPAC) segment grew to $58.1 million from $53.7 million, helped by the Calca Solutions business acquired October 1, 2025.
The forward catalysts are the recovery (or continued softness) in additive shipment volumes and the ramp of the specialty-materials and defense-related business. The integration and growth of AMPAC and Calca in aerospace and defense materials is the clearest source of incremental growth outside the mature additives core, and bolt-on acquisitions funded from cash are part of NewMarket's pattern.
The watch items are lubricant and fuel additive demand trends, the pace of the EV transition as a long-term headwind to engine-oil additives, raw-material costs and pricing, and capital allocation between buybacks, dividends, and acquisitions. A stabilization or rebound in additive shipments alongside continued AMPAC growth would support the view that the price underrates a durable franchise; continued volume declines would validate the concern about a structural fade. Sources: NewMarket Q1 2026 results (newmarket.com; stocktitan.net; businesswire.com), April 2026.
Peer Cohorts (Per Segment, With Filing Citations)
Petroleum additives (reported)
- CBT (Cabot Corporation)
- FY2025 10-K: …sale of specialty carbons and products for battery materials applications with a mix of global and regional companies. In recent years, a number of these companies that operate regionally have increased the export of products outside their region of manufacture. For fumed alumina, we compete primarily with one…
- FY2025 10-K: …conductive additives and other materials for battery applications, and inkjet dispersions for high-speed industrial printing applications, including packaging and graphic arts. The recent investments we have made for growth in this segment, including with respect to these specific areas of focus, are described below…
- EMN (EASTMAN CHEMICAL CO)
- FY2025 10-K: ™ , and SunTek ™ window and protective films. 10 Tab le of Contents ADDITIVES & FUNCTIONAL PRODUCTS SEGMENT Overview In the AFP segment, the Company manufactures materials for products in the food, feed, and agriculture; transportation; water treatment and energy; personal care and wellness; building and construction;…
- FY2025 10-K: …gut health solutions preservation and hygiene Coatings Additives Polymers cellulosics polyesters polyolefins Additives and Solvents Texanol ™ Optifilm ™ ketones esters EastaPure ™ electronic chemicals specialty coalescents specialty solvents paint additives specialty polymers BASF SE Dow Inc. OXEA Celanese…
- IOSP (INNOSPEC INC.)
- FY2025 10-K: …fuel efficiency, boost engine performance and reduce harmful emissions. Our Oilfield Services business supplies chemicals for drilling, completion, production and drag reducing agents ("DRA") which make oil and gas exploration and production more cost-efficient and environmentally friendly. Segment Information The…
- FY2025 10-K: …with developing customer needs. In addition, the business has developed further formulations in emollients, silicones and surfactants for the personal care, home care, agrochemical, construction, mining and other industrial markets. Fuel Specialties has continued to innovate, focused on bringing new technologies to…
- HUN (Huntsman Corporation)
- FY2025 10-K: …gas treating, oilfield chemicals, polyurethane insulation and flexible foams, semiconductor manufacturing and solvents. Our amines customers include Afton, Bayer, Chevron, DuPont, Evonik, Hipower, Infineum, Lubrizol, Quadra Chemicals and Univar. Maleic Anhydride. Maleic anhydride is a highly versatile chemical…
- FY2025 10-K: …representative customers, raw materials and representative competitors of each of our business segments: Product lines End markets / applications Representative customers Raw materials Representative competitors Polyurethanes MDI Polyurethane chemicals are used to produce rigid and flexible foams, as well as…
- SXT (Sensient Technologies Corp)
- FY2025 10-K: …ingredients, and essential oils as well as flavor systems, including taste modulation, that are responsive to consumer trends and the processing needs of our food and beverage customers. These activities include the development of functional ingredient systems for foods and beverages, savory flavors, and ingredient…
- FY2025 10-K: …and other ingredients derived from botanicals, including beta-carotene, beet, carrot, potato, butterfly pea flower, spirulina, and paprika, are sourced in various geographies through local partnerships, which are generally vertically integrated with local farmers and juicing/extraction facilities. In the production…
- IFF (INTERNATIONAL FLAVORS & FRAGRANCES INC)
- FY2025 10-K: …Re gistrant and Neptune Merger Sub II LLC, incorporated by reference to Exhibit 2.1 to the Registrant's Current Report on Form 8-K filed on January 25, 2021. 2.4(ii) Amendment No. 2 to the Separation and Distribution Agreement, dated February 1, 2021, by and among DuPont de Nemours, Inc., Nutrition & Biosciences,…
- FY2025 10-K: …functional properties solutions for food and beverage products, as well as specialty soy and pea protein with value-added formulations, emulsifiers and sweeteners. Natural food protection ingredients consist of natural antioxidants and anti-microbials used for natural food preservation and shelf-life extension for…
- MTX (MINERALS TECHNOLOGIES INC.)
- FY2025 10-K: …gas services companies. In building materials applications, the Company competes in a highly fragmented market comprised of a wide variety of alternative technologies. A number of integrated bentonite companies compete with the Company's drilling products. Seasonality Some of our products within the Environmental &…
- FY2025 10-K: …as specialty additives that become functional components in a variety of consumer and industrial goods. The two product lines in this segment are Household & Personal Care, which delivers minerals-to-market products to a variety of consumer-oriented markets, including pet care, personal care, fabric care, edible oil…
- AVNT (AVIENT CORPORATION)
- FY2025 10-K: …are primarily customer receivables, inventories, net property, plant and equipment, intangible assets and goodwill. Corporate assets and liabilities primarily include cash, debt, pension and other employee benefits, environmental liabilities, and other unallocated corporate assets and liabilities. The accounting…
- FY2025 10-K: …income at the segment level does not include corporate general and administrative expenses that are not allocated to segments, restructuring charges, share-based compensation costs, environmental remediation costs and associated recoveries, asset impairments, acquisition-related charges, mark-to-market adjustments on…
Specialty materials (reported)
- AVNT (AVIENT CORPORATION)
- FY2025 10-K: …Europe, the Middle East, and Africa. We own the majority of our manufacturing sites. We believe that the quality and production capacity of our facilities is sufficient to maintain our competitive position for the foreseeable future. The following table identifies the principal facilities of our segments: Specialty…
- FY2025 10-K: …are primarily customer receivables, inventories, net property, plant and equipment, intangible assets and goodwill. Corporate assets and liabilities primarily include cash, debt, pension and other employee benefits, environmental liabilities, and other unallocated corporate assets and liabilities. The accounting…
- CE (CELANESE CORPORATION)
- FY2025 10-K: Asia and consist of 51 global production facilities and an additional 20 strategic affiliate production facilities. As of December 31, 2025, we employed 11,434 people worldwide. Business Segment Overview We operate principally through two business segments: Engineered Materials and the Acetyl Chain. See Business…
- FY2025 10-K: …as well as the manner in which the information is used internally by the Company's chief operating decision maker ("CODM"), who is the Company's President and Chief Executive Officer. The Company's CODM regularly reviews the Operating profit of each reportable segment to assess financial results and allocate…
- EMN (EASTMAN CHEMICAL CO)
- FY2025 10-K: ™ , and SunTek ™ window and protective films. 10 Tab le of Contents ADDITIVES & FUNCTIONAL PRODUCTS SEGMENT Overview In the AFP segment, the Company manufactures materials for products in the food, feed, and agriculture; transportation; water treatment and energy; personal care and wellness; building and construction;…
- FY2025 10-K: …polymers, films, and plastics with differentiated performance properties for value-added end-uses in transportation; durables and electronics; building and construction; medical and pharma; and consumables end-markets. Key technology platforms for this segment include cellulosic biopolymers, copolyesters, and PVB and…
- HUN (Huntsman Corporation)
- FY2025 10-K: …aluminum panels and other steel materials to lighten structures in aerospace, automotive and other transportation. Our Advanced Materials segment is characterized by the breadth of our product offering, our expertise in complex chemistry, our long-standing relationships with our customers, our ability to develop and…
- FY2025 10-K: …of suppliers. We consume certain amines produced by our Performance Products segment and isocyanates produced by our Polyurethanes segment, which we use to formulate our Advanced Materials products. For additional information about our risks of raw material supply chain disruptions, see "Part I. Item 1A. Risk…
- CC (Chemours Co)
- FY2025 10-K: …capabilities, and deep customer knowledge. Key competitors for the Thermal & Specialized Solutions segment include Solstice Advanced Materials, Inc., Arkema S.A., Orbia, and Daikin Industries, Ltd, Chinese Fgas producers, and, to a certain extent, other industrial gas producers. Thermal & Specialized Solutions'…
- FY2025 10-K: Specialized Solutions segment, we are a leading, global provider of refrigerants, thermal management solutions, propellants, foam blowing agents, and specialty solvents. Our Thermal & Specialized Solutions segment has held a leading position in the refrigerants market since the commercial introduction of Freon TM in…
- ROG (Rogers Corporation)
- FY2025 10-K: …Our competitors include commodity materials suppliers, which offer product substitutions based mostly on price, and suppliers of alternate solutions, which offer product substitutions or eliminations based mostly on disruptive technology. Certain of these competitors have greater financial and other resources than we…
- FY2025 10-K: …our operating segments, we believe that a significant part of our competitive position and future success will be determined by factors such as the innovative skills, systems and process knowledge, and technological expertise of our personnel; the range of new products we develop; and our customer service and…
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.