NEU
NewMarket Corporation
$779.15
Platform & Compounding FCF
50%
Two-stage FCF DCF
Mild
·
Conviction
Fair Value
Trading 13.9% below fair value
You pay
$779.15
Bear
$691.00
Fair
$904.97
Bull
$1,105.04
Bear
$691.00
-11.3%
5% stage 1 growth, 11% discount
Fair
$904.97
+16.1%
8% stage 1 growth, 11% discount
Bull
$1,105.04
+41.8%
11% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (8% base case)
Terminal Value % of EV
37%
Implied Market Multiple
16.4x
Market is pricing in (growth)
6.3%
vs 8.1% base
Summary
Using a two-stage FCF DCF with 8% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $904.97 per share.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions