NEU
NewMarket Corporation
$903.63
Platform & Compounding FCF
50%
Two-stage FCF DCF
Mild
·
Conviction
Fair Value
Trading 6.4% below fair value
You pay
$903.63
Bear
$738.73
Fair
$965.65
Bull
$1,177.84
Bear
$738.73
-18.2%
5% stage 1 growth, 11% discount
Fair
$965.65
+6.9%
8% stage 1 growth, 11% discount
Bull
$1,177.84
+30.3%
11% stage 1 growth, 11% discount
Adjust Assumptions
8.1%
11.0%
3.0%
Key Value Driver
FCF growth rate (8% base case)
Terminal Value % of EV
37%
Implied Market Multiple
17.7x
Market is pricing in (growth)
7.3%
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 $965.65 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