SCL
Stepan Co
$61.03
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Overvalued
Trading 1.5% above fair value
You pay
$61.03
Bear
$48.10
Fair
$60.12
Bull
$72.14
Bear
$48.10
-21.2%
$4.01 × 12x P/E
Fair
$60.12
-1.5%
$4.01 × 15x P/E
Bull
$72.14
+18.2%
$4.01 × 18x P/E
Adjust Assumptions
15.0x
4.01$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
15.2x
Summary
Applying a 15x P/E to adjusted EPS of $4.01, the base-case value is $60.12 per share. DDM cross-check: $35.12.
Warnings
The company's reported profits differ from official accounting profits by 96%. Check what costs are being left out of the adjusted number.
Dividend-based valuation: $35.12 (below our primary estimate by 42%). Large gaps may signal the dividend doesn't reflect full earning power.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples