| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 74 | — | 17.7x | Top tier | |
Growth | 24 | 7.6% | 7.1% | Bottom tier | |
Quality | 21 | 1.1% | 4.5% | Bottom tier | |
Safety | 45 | 4.0x | 2.6x | Around median | |
Capital Return | 71 | 2.40% | 2.16% | Top tier | |
Momentum | 85 | 29.1% | 2.1% | Top tier | |
Sentiment | 24 | 1 | 3 | Bottom tier |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
Stepan Company operates through three interconnected segments: Surfactants, Polymers, and Specialty Products. The company generates revenue from the sale of products used in industrial cleaning, laundry, construction, industrial solutions, oilfields, and agricultural productivity, as well as rigid polyols, PA, spray foam products, and medium-chain triglycerides. Sales are affected by demand volume, selling prices, product and customer mix, and raw material cost pass-through mechanisms, while the profitability improvement plan depends on margin recovery and improving the efficiency of the manufacturing network through Project Catalyst.
In Q2 FY2026, net sales increased 15% year over year to $684 million, and organic volume grew 6% across end markets. Reported net income was $22.9 million, or $1.00 per diluted share, compared with $11.3 million and $0.50, respectively, while adjusted net income increased 126% to $27.1 million and adjusted earnings per share rose to $1.18. Adjusted EBITDA also reached $74.4 million, an increase of 45%, representing a margin of approximately 10.9% of sales.
Surfactants accounted for approximately 70.8% of Q2 FY2026 sales, with revenue of $484 million and adjusted EBITDA of $55 million, up 18% and 59%, respectively. Polymers contributed approximately 26.0% of sales, with revenue of $178 million and adjusted segment earnings of $31 million, while Specialty Products generated $22 million in sales and adjusted segment earnings of $6.5 million. Reported results also included a pre-tax restructuring expense of $5.1 million, largely related to the closure of the Fieldsboro site and the decommissioning of selected assets at Millsdale and Stalybridge.
Automated analysis for informational purposes only — not investment advice.
The analyst consensus is “Buy,” with an average price target of $85 and identical high and low targets of $85; this target is 25% above the 52-week range high of $68, but the lack of dispersion among targets indicates a limited or highly concentrated estimate base. The 52-week range is between $41.82 and $68, and no meaningful P/E ratio is available because 2026 trailing-twelve-month data show a net loss of $14.2 million and negative earnings per share of approximately $0.62, despite Q2 FY2026 returning to reported net income of $22.9 million.
Figures in the text are as of 2026-09-01; the live price is shown at the top of the page.
Net sales increased 15% to $684 million, with organic volume growth of 6% and improvements in pricing, mix, and currency translation. Adjusted EBITDA jumped 45% to $74.4 million, and adjusted net income increased 126% to $27.1 million. The improvement came primarily from higher Surfactants and Polymers volumes, margin recovery, and Project Catalyst savings. However, management estimated that early purchasing shifted between $5 million and $10 million of operating earnings from Q3 to Q2.
Project Catalyst targets approximately $100 million in pre-tax savings over two years, with more than $60 million expected in FY2026. Management said on the July 29, 2026 call that the program is currently generating quarterly savings of between $18 million and $20 million, with a targeted rate of approximately $22 million by year-end. Actions included closing Fieldsboro and decommissioning selected assets at Millsdale and Stalybridge, along with a plan to eliminate approximately 100 salaried positions in Q3 FY2026. In contrast, the company expects total restructuring expenses of between $75 million and $80 million during FY2026.
The spray foam business grew to three times its level in the comparable quarter, although management emphasized that the starting point was small. This business, together with rigid polyols and PA, contributed to strong double-digit growth in Polymers volumes in North America during Q2 FY2026. Polymers sales increased 9% to $178 million, and adjusted segment EBITDA rose 22% to $31 million. Management did not provide a numerical outlook for the business, but said the company wants to build share and participate in market growth over the five to ten years following the date of the call.
Growth was broad-based, as organic Surfactants volume increased 7% and Polymers volume grew 5%, and the company recorded 500 new customer and product formulations in the first half. However, management attributed part of the strength to early purchasing caused by geopolitical and raw material uncertainty and estimated its impact at between $5 million and $10 million of EBITDA. It also expected Q3 FY2026 to be slightly below Q2 after volume and margins normalize. Polymers maintenance cycles will add another negative impact of $4–5 million in the second half of FY2026.
Net debt was $534 million at the end of Q2 FY2026, and net leverage improved to 2.5 times from 2.7 times in the previous quarter and 2.9 times a year earlier. The company generated $56 million of operating cash flow before working capital changes, including a $6 million restructuring cash impact. However, free cash flow was negative by $15 million after capital expenditures of $23 million and a working capital build of $58 million. Management is targeting positive free cash flow and continued deleveraging during FY2026.
The Surfactants segment generated sales of $484 million, representing approximately 70.8% of the company’s $684 million in sales, and adjusted segment earnings were $55 million. The Polymers segment recorded sales of $178 million, representing approximately 26.0% of the total, and adjusted segment earnings of $31 million. Specialty Products recorded sales of $22 million and adjusted segment earnings of $6.5 million. The two main segments grew with support from volume, pricing, and margin recovery, while Specialty Products earnings declined slightly because of a less favorable mix in medium-chain triglycerides.
