ENPRO INC (NPO): what the price requires
The current priced-in claim for ENPRO INC (NPO) is temporarily suppressed because the live engine record is unavailable. The dated report remains a snapshot, not a current market read.
Generated: 2026-07-14 · Exported: 2026-07-17 · Source: https://boothcheck.com/report/NPO
Headline
| Field | Value |
|---|---|
| Ticker | NPO |
| Company | ENPRO INC |
| Current price | $324.44/sh |
| Composition | Aerospace 8% / Commercial vehicle 15% / Food and biopharmaceutical 7% / General industrial 26% / Oil and gas 6% / Power generation 6% / Semiconductors 32% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 325.8% |
| Operating margin (mid-cycle) | 525.4% |
| Margin compression implied | -199.6pp |
| Trailing margin (depressed year) | 19.5% |
| Multiple paid | 2x mid-cycle operating income |
The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.
The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.
Solve inputs: computed at a 10.9% 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 | -0.26σ |
| implied end-window share | 0% |
Valuation X-Ray
Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).
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 | 10.15x | 2 | expensive |
| Earnings | 12.20x | 4 | expensive |
| Relative | 2.36x | 3 | expensive |
| Growth | 1.12x | 3 | expensive |
Families that justify the price: Growth Families that call it expensive: Asset, Earnings, Relative
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.6%); the inversion above states its own rate.
Per-Model Detail (n=12)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $119.36 | 2.72x | yes | FCF base $0.1B, growth 10% (input: historical growth), terminal g 4.0%, WACC 8.6%, 6yr projection |
| DCF Exit Multiple | Growth | $324.19 | 1.00x | yes | Exit EV/EBITDA: 25.8x / 27.8x / 29.8x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $137.32 | 2.36x | yes | P/E 39.6x (blended: static sector reference 18x + trailing (TTM) 159x), scenarios: 33.0x / 39.6x / 46.2x (bear / base = reference held flat / bull), EV/EBITDA 16.73x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $22.03 | 14.73x | yes | BV/sh $73.37, ROE (TTM) 2.8%, ke 9.3% |
| Two-Stage Excess Return | Asset | $12.96 | 25.03x | yes | 5yr excess ROE then converge to ke=9.3% (excluded from median) |
| Discounted Future Market Cap | Growth | $290.89 | 1.12x | yes | Rev $1.2B, growth 10% (input: historical growth; tapered), Terminal P/S: 4.9x / 5.9x / 6.9x (bear / base = today's held flat / bull, cap 8x) |
| Growth-Adjusted P/E | Relative | — | — | no | — |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $30.25 | 10.73x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.12B × (1−19%) / WACC 8.6% → EPV (no growth) |
| Residual Income | Asset | $9.58 | 33.87x | yes | BV $73.37 + 5yr PV of (ROE (TTM) 2.8% − Kₑ 9.3%) × BV; BV grows 1.8%/yr (excluded from median) |
| Graham Number | Asset | $58.17 | 5.58x | yes | √(22.5 × EPS $2.05 × BVPS $73.37) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $125.92 | 2.58x | yes | EBITDA $0.27B × sector EV/EBITDA 12.0x |
| FCF Yield | Earnings | $31.00 | 10.47x | yes | FCF $110.9M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $23.74 | 13.67x | yes | SBC-adj FCF $0.10B (FCF $0.11B − SBC $0.01B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $1.72 | 188.63x | yes | EPS $2.05 × (8.5 + 2×-5.0%) × (4.4 / 5.3%) (excluded from median) |
| ROIC-Justified P/B | Asset | $14.29 | 22.70x | yes | BV $73.37 × (ROIC 1.7% / WACC 8.6%) (excluded from median) |
| P/Sales Sector | Relative | $137.69 | 2.36x | yes | Revenue $1.17B × sector P/S 2.5x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | $22.16 | 14.64x | yes | EPS $2.05 / 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 | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $576.1m |
| Net debt / NOPAT (after-tax) | 0.15x |
| Net debt / operating income (pre-tax) | 0.12x |
| Interest coverage | 133.9x |
| Share count CAGR (dilution) | 0.5% |
| Burning cash | no |
Leverage and coverage are computed on normalized mid-cycle operating income (mid-cycle margin 525.4%); the trailing year was depressed.
Bullet Takeaways
- Enpro makes precision sealing products and advanced surface coatings for demanding applications, with brands the filing describes as built on long-standing reputations for reliability, engineering expertise, safety and durability, and roughly a third of revenue now tied to semiconductors.
- The defining risk is the price: only a forward-growth model reaches it, while asset, earnings-power, and peer-multiple lenses all call it richly valued, so the buyer is paying for sustained high-margin compounding to continue.
- The next markers are the semiconductor demand cycle running through Advanced Surface Technologies and the raised 2026 guidance, adjusted EBITDA of $315 to $330 million and adjusted EPS of $8.85 to $9.50.
Bull Case
Enpro's moat is the kind that does not show up in a logo or a slogan; it shows up in the margins. Its Sealing Technologies business ran a 32.5% adjusted EBITDA margin in the first quarter of 2026, the signature of products that customers cannot easily substitute. The 10-K explains why: brands like Garlock and Technetics are built upon long-standing reputations for reliability, engineering expertise, safety and durability. When a seal failure means a refinery shutdown, a contaminated drug batch, or a wrecked semiconductor wafer, the buyer specifies the proven part and does not shop on price. That is pricing power earned over decades, and it converts directly into margin.
The portfolio has been deliberately repositioned toward higher-growth, higher-margin end markets, and semiconductors are now the engine. Advanced Surface Technologies, which cleans and coats the chambers and components used to make chips, grew adjusted EBITDA 18.5% in the quarter on semiconductor capital-equipment demand, and roughly a third of total revenue now rides the chip cycle. This is precision work tied to the most demanding manufacturing process in the world, and the installed base generates recurring cleaning and refurbishment revenue alongside new equipment. Group adjusted EBITDA margin reached 25.2% in the first quarter on sales up 10.9% to $303 million.
The capital discipline rounds it out. Enpro generated $153.1 million of free cash flow in 2025, repaid $50 million of revolving debt in the first quarter of 2026, and brought net leverage down to 1.9 times adjusted EBITDA. It funds bolt-on acquisitions like AlpHa Measurement Solutions and Overlook Industries from that cash flow while keeping the balance sheet conservative. Management raised full-year 2026 guidance to 10% to 14% revenue growth, adjusted EBITDA of $315 million to $330 million, and adjusted EPS of $8.85 to $9.50, the kind of upgrade that signals confidence the high-margin franchise is widening, not just holding.
Bear Case
The balance sheet carries a liability most industrials do not, and it is the right place to start the bear case. Enpro inherited legacy environmental and product obligations, and the 10-K shows it still records reserves for them: aggregate environmental liabilities of $42.2 million at year-end 2025, with reasonably likely costs at two priority mine sites ranging from $ 3.6 million to $ 15.9 million depending on the remediation option chosen. These are not large relative to the company, but they are open-ended in a way operating liabilities are not, subject to adjustment as additional technical data and legal information arrives. A negative regulatory or legal development is a charge the bull case has no line item for.
On top of that sits the conventional debt. Enpro ended the quarter with about $605 million of total debt against $79 million of cash, a net leverage near 1.9 times EBITDA. That is manageable in good times, but Enpro is now heavily exposed to the semiconductor capital-equipment cycle, which is among the most volatile in industrials. The 10-K notes the segment is dependent on a concentrated customer base, since a small number of companies control a significant majority of the global production of semiconductor manufacturing equipment. When that handful of customers cuts capital spending, as they do sharply in chip downturns, the highest-margin, fastest-growing part of Enpro contracts fastest, and a leveraged balance sheet leaves less room to absorb the swing.
The valuation magnifies both risks. Only a forward-growth model reaches today's price; the asset, earnings-power, and peer-multiple lenses all call it richly valued. The trailing GAAP price-to-earnings sits far above the peer group because reported earnings are depressed by amortization and legacy items, and even the forward multiple on adjusted earnings runs well above the industrial sector average. A buyer here is paying a premium for durable compounding, with a chip-cycle-exposed revenue mix and a balance sheet carrying both leverage and legacy reserves. If semiconductor demand cools or a legacy liability re-rates, the premium has a long way to fall before any conservative method catches it.
Valuation
The valuation reads as a durability premium, and the evidence is the pattern across methods. Value Enpro on its assets, its current earnings power, or the multiples its industrial peers trade at, and every one of those lenses calls the stock richly valued. Only a forward-growth model reaches today's $380 (June 27, 2026). That is the market pricing a moat the static frames cannot capture: the recurring, high-margin economics of mission-critical sealing and semiconductor surface technology.
The trailing GAAP earnings are the wrong starting point and worth flagging. Reported net income is depressed by amortization of acquired intangibles and legacy items, which is why the trailing price-to-earnings looks extreme. The forward multiple on adjusted earnings, against management's $8.85 to $9.50 guidance, is far more representative, and even that runs well above the industrial sector average. The honest read is that the price has already paid for the high-margin compounding in full.
Solvency is solid but not a fortress, and it is where the caution belongs. Net leverage near 1.9 times adjusted EBITDA is comfortable, interest is well covered, and the company is paying down debt and generating real free cash flow, $153 million in 2025. But Enpro also carries legacy environmental reserves of about $42 million that operating businesses do not, and its highest-growth revenue is tied to the semiconductor capital cycle. The downside is bounded by a healthy balance sheet and genuine cash generation; the bet the buyer underwrites is that the chip-driven growth and the premium margins persist long enough to justify a multiple that every conservative lens already calls full.
Catalysts
The first quarter of 2026 was a beat-and-raise. Net sales grew 10.9% year over year to $303 million, adjusted EBITDA rose to $76.4 million at a 25.2% margin, and adjusted EPS of $2.14 beat the $2.07 consensus. The standout was Advanced Surface Technologies, where sales reached $104.2 million and adjusted EBITDA grew 18.5% on semiconductor capital-equipment demand, while Sealing Technologies posted $199 million in sales at a 32.5% adjusted EBITDA margin, helped by the AlpHa Measurement Solutions and Overlook Industries acquisitions.
Management raised full-year 2026 guidance to revenue growth of 10% to 14%, adjusted EBITDA of $315 million to $330 million, and adjusted diluted EPS of $8.85 to $9.50. On the balance sheet, the company repaid $50 million of revolving debt in the quarter, bringing net leverage to 1.9 times trailing adjusted EBITDA, with operating cash flow of $201.2 million and free cash flow of $153.1 million for the prior year.
Analyst sentiment is constructive and tracking the print higher. KeyBanc raised its target to $345 from $310 with an Overweight rating after the quarter, and the consensus target moved up about 9% to roughly $327, with a range from $305 to $345. The markers that adjudicate the thesis are the semiconductor demand cycle feeding Advanced Surface Technologies, the pace of margin-accretive bolt-on acquisitions, and whether the raised guidance proves conservative as the year progresses.
Peer Cohorts (Per Segment, With Filing Citations)
Sealing Technologies (reported)
- ITT (ITT INC.)
- (no filing in the citation store)
- FLS (FLOWSERVE CORP)
- (no filing in the citation store)
- DOV (DOVER Corp)
- (no filing in the citation store)
- CW (CURTISS-WRIGHT CORPORATION)
- (no filing in the citation store)
- IEX (IDEX CORP)
- (no filing in the citation store)
- CR (CRANE COMPANY)
- (no filing in the citation store)
- PH (PARKER-HANNIFIN CORPORATION)
- (no filing in the citation store)
Advanced Surface Technologies (reported)
- UCTT (Ultra Clean Holdings, Inc.)
- (no filing in the citation store)
- ICHR (Ichor Holdings, Ltd.)
- (no filing in the citation store)
- ACMR (ACM Research, Inc.)
- (no filing in the citation store)
- ENTG (Entegris, Inc.)
- (no filing in the citation store)
- MKSI (MKS INC)
- (no filing in the citation store)
- AEIS (ADVANCED ENERGY INDUSTRIES INC)
- (no filing in the citation store)
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.
- 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.
Sources
Enpro Q1 2026 earnings release · Enpro Q1 2026 earnings call · Enpro Q1 2026 results · Enpro Q1 2026 guidance · KeyBanc and consensus analyst notes, 2026