NewMarket stock at a glance
NewMarket (NEU) has caught investor attention after recent trading left the shares with a month return of about a 14% decline and a past 3 months return near a 19% decline.
See our latest analysis for NewMarket.
Despite the recent 30 day share price return of about a 14% decline and a 90 day share price return near a 19% decline, NewMarket’s 1 year total shareholder return of about 15% and multi year total shareholder returns above 70% indicate longer term holders have still seen gains. This suggests recent weakness may reflect shifting sentiment on future growth and risk rather than a complete break from the stock’s broader performance profile.
If NewMarket’s recent moves have you thinking about where else value might be hiding, this could be a good moment to check out 20 top founder-led companies as a fresh set of ideas.
With NewMarket trading around $623 and an estimated intrinsic value implying roughly a 49% discount, the key question is whether the recent share price slide has opened a genuine value gap or if the market is already factoring in its future growth.
Price-to-Earnings of 14x: Is it justified?
NewMarket is trading on a P/E of 14x, which looks restrained when you set it against the current share price of about $623 and its recent total return profile.
The P/E multiple tells you how much investors are currently paying for each dollar of earnings. For a business focused on petroleum additives with positive net income of about $417.1m and a long operating history, earnings are a core part of the story, so this yardstick matters.
Here, the market is valuing NewMarket at a meaningfully lower P/E than both its direct peers, where the peer average sits at 27.6x, and the broader US Chemicals industry at 25.6x. That wide gap suggests investors are currently assigning NewMarket a lower earnings multiple than many comparable companies, while the SWS DCF model separately points to a fair value of about $1,218.68 per share, well above the last close of $623.17.
See what the numbers say about this price — find out in our valuation breakdown.
Result: Price-to-Earnings of 14x (UNDERVALUED)
However, you also have to weigh risks such as exposure to global fuel demand and any sustained margin pressure that could challenge the current P/E and intrinsic value story.
Find out about the key risks to this NewMarket narrative.
Another way to look at value
The P/E comparison presents NewMarket as inexpensive relative to peers, but our DCF model goes further. It places fair value near $1,218.68 per share versus the current $623.17, implying a gap of roughly 49%. Is the market overreacting to recent earnings softness, or is the model too optimistic?
Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out NewMarket for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 48 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Next Steps
If this mix of positives and concerns feels finely balanced, it is worth moving quickly to check the full picture and weigh it yourself with 2 key rewards and 1 important warning sign.
Looking for more investment ideas?
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- Start with quality by scanning for companies that pair earnings potential with durable balance sheets using our solid balance sheet and fundamentals stocks screener (41 results).
- Hunt for potential upside by reviewing our 48 high quality undervalued stocks, which highlights stocks the model prices below their estimated fair value.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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