Stepan Company (SCL, Financial) has revealed that its unit, Stepan Philippines Quaternaries (SPQI), will sell its manufacturing facilities in Bauan, Batangas, Philippines. The buyer, Masurf, is a part of Musim Mas Holdings. To ensure continued service to customers, SPQI will establish a tolling agreement with Masurf following the completion of the sale. The transaction remains contingent upon standard closing conditions, and specific terms have not been made public.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 1 analysts, the average target price for Stepan Co (SCL, Financial) is $85.00 with a high estimate of $85.00 and a low estimate of $85.00. The average target implies an upside of 56.16% from the current price of $54.43. More detailed estimate data can be found on the Stepan Co (SCL) Forecast page.
Based on the consensus recommendation from 2 brokerage firms, Stepan Co's (SCL, Financial) average brokerage recommendation is currently 2.5, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Stepan Co (SCL, Financial) in one year is $87.04, suggesting a upside of 59.91% from the current price of $54.43. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Stepan Co (SCL) Summary page.
SCL Key Business Developments
Release Date: April 29, 2025
- Adjusted EBITDA: $57.5 million, up 12% year-over-year.
- Volume Growth: Overall volume grew 4%; Surfactants up 3%, MCT product line up 4%.
- Adjusted Net Income: $19.3 million, a 32% increase from the prior year.
- Net Income per Share: $0.84 per diluted share, up from $0.64 per diluted share last year.
- Surfactant Net Sales: $430.3 million, a 10% increase year-over-year.
- Polymer Net Sales: $146.1 million, with a 7% increase in sales volume.
- Specialty Products Net Sales: $16.8 million, an 11% increase year-over-year.
- Free Cash Flow: Negative $25.8 million for the quarter.
- Dividends Paid: $8.7 million in dividends to shareholders.
- Quarterly Cash Dividend: $0.385 per share, payable on June 13, 2025.
- Effective Tax Rate: 20%, lower than the normal range of 24% to 26%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Stepan Co (SCL, Financial) reported a 12% increase in adjusted EBITDA for the first quarter of 2025, reaching $57.5 million.
- The company experienced a 4% volume growth, with notable increases in the Surfactants and MCT product lines.
- Stepan Co (SCL) successfully started operations at its new Pasadena, Texas site, which is expected to contribute positively in the second half of 2025.
- The company paid $8.7 million in dividends and declared a quarterly cash dividend, marking 57 consecutive years of dividend increases.
- Stepan Co (SCL) added over 400 new customers in the first quarter, reflecting successful customer acquisition efforts.
Negative Points
- Free cash flow was negative at $25.8 million for the first quarter, down $37.2 million year over year.
- The Polymers segment experienced a slight decrease in adjusted EBITDA due to less favorable product mix and high-cost inventory carryover.
- Global macroeconomic uncertainties and high-interest rates continue to restrain Rigid Polyol growth in North America and Europe.
- The company faced higher pre-operating expenses at the Pasadena, Texas site, impacting overall profitability.
- Foreign currency translation negatively impacted net sales by 5% in the Surfactants segment.
