Stepan: Assessing Valuation After Recent Share Price Rebound

Stepan (SCL) has experienced a recent 1-month share price rebound of 8%, but its year-to-date share price loss and weak multi-year total shareholder return suggest the momentum is still in an early repair phase. Despite a steep price-to-earnings ratio of 22.9x, our DCF model estimates the shares trade about 57% below a fair value of $107.95, indicating deep undervaluation. Investors must consider whether this is a mispriced rebound story or if the market is already factoring in future growth.