NEU
NewMarket Corporation
$737.72
Platform & Compounding FCF
50%
Two-stage FCF DCF
Moderate
·
Conviction
Fair Value
Trading 18.6% below fair value
You pay
$737.72
Bear
$692.64
Fair
$906.60
Bull
$1,106.68
Bear
$692.64
-6.1%
5% stage 1 growth, 11% discount
Fair
$906.60
+22.9%
8% stage 1 growth, 11% discount
Bull
$1,106.68
+50.0%
11% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (8% base case)
Terminal Value % of EV
37%
Implied Market Multiple
15.6x
Summary
Using a two-stage FCF DCF with 8% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $906.60 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