Is Stepan Co. overvalued or undervalued?

As of 24 October 2025, the valuation grade for Stepan Co. has moved from attractive to fair, indicating a shift in its perceived value. The company appears to be overvalued based on its current metrics, with a P/E ratio of 26, a Price to Book Value of 1.23, and an EV to EBITDA of 10.60, which are higher than those of its peers such as NewMarket Corp. with a P/E of 16.30 and ChampionX Corp. with a P/E of 15.52.
The peer comparison highlights that Stepan Co.'s valuation ratios are not competitive within the specialty chemicals industry, suggesting that investors may be paying a premium for its shares. Furthermore, the company's returns have significantly lagged behind the S&P 500, with a year-to-date return of -28.69% compared to the index's 15.47%. This underperformance reinforces the notion that Stepan Co. is currently overvalued.