NewMarket (NEU) Margin Decline Challenges Long Term Earnings Growth Narrative

Simply Wall St.02-13

NewMarket (NEU) has wrapped up FY 2025 with fourth quarter revenue of US$635.4 million and basic EPS of US$8.65, anchored by net income of US$81.3 million, alongside trailing twelve month revenue of ...

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Over recent quarters, the company has seen revenue move from US$700.9 million and EPS of US$13.26 in Q1 2025 through to US$698.5 million and EPS of US$11.84 in Q2, US$690.3 million and EPS of US$10.67 in Q3, and then US$635.4 million and EPS of US$8.65 in...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":["earning"],"viewcount":null,"language":"en","relate_stocks":{"NEU":"NewMarket","NEU.AU":"NEUREN PHARMACEUTICALS LTD"},"translate_title":"纽马克特(NEU)利润率下降挑战长期盈利增长叙事","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"NEU.AU":1.5,"NEU":1.5},"content_text":"NewMarket (NEU) has wrapped up FY 2025 with fourth quarter revenue of US$635.4 million and basic EPS of US$8.65, anchored by net income of US$81.3 million, alongside trailing twelve month revenue of US$2.7 billion and basic EPS of US$44.44. Over recent quarters, the company has seen revenue move from US$700.9 million and EPS of US$13.26 in Q1 2025 through to US$698.5 million and EPS of US$11.84 in Q2, US$690.3 million and EPS of US$10.67 in Q3, and then US$635.4 million and EPS of US$8.65 in Q4. This sets up a story where softer recent earnings sit against a five year earnings growth rate of 17.1% per year and margins that have compressed from 16.5% to 15.4%. See our full analysis for NewMarket. With the latest numbers on the table, the next step is to see how this margin picture and earnings trajectory line up with the widely held narratives around NewMarket and where those stories might need updating. Curious how numbers become stories that shape markets? Explore Community Narratives NYSE:NEU Earnings & Revenue History as at Feb 2026 AdvertisementFour quarters of softer profit  Across FY 2025, net income stepped down each quarter from US$125.5 million in Q1 to US$81.3 million in Q4, with EPS moving in the same pattern from US$13.26 to US$8.65. What stands out against the bullish focus on NewMarket’s 17.1% annual earnings growth over five years is that trailing 12 month net income of US$418.7 million now sits below the prior year’s US$460.8 million, even though bulls often point to that multi year growth rate as a core strength.\n     This drop in trailing net income lines up with the quarterly step down from US$125.5 million in Q1 2025 and US$110.8 million in Q2 to US$81.3 million by Q4, which contrasts with a smooth long run growth story. At the same time, trailing EPS of US$44.44 is only slightly below the US$48.22 level a year earlier, so the longer term growth figure still has support but now sits alongside a more mixed recent pattern.    Margins slip from 16.5% to 15.4%  Net profit margin over the last 12 months came in at 15.4%, compared with 16.5% in the prior year, matching the move in trailing net income from US$460.8 million to US$418.7 million on roughly similar revenue levels of around US$2.7b. Bears who focus on pressure on profitability get some backing here, as the lower margin lines up with Q4 2025 net income of US$81.3 million on US$635.4 million of revenue compared with Q4 2024 net income of US$110.3 million on US$654.6 million of revenue.\n     The fact that trailing revenue has hovered in a tight band near US$2.7b while margins moved from 16.5% to 15.4% indicates that a slightly smaller share of each sales dollar is now dropping to profit than a year ago. That said, the five year earnings growth rate of 17.1% per year shows that this recent margin drift sits against a longer record of earnings expansion, which tempers a purely bearish read on profitability.    P/E of 13.4x versus higher peers  NewMarket trades on a P/E of 13.4x, which is roughly half of both the peer average of 27.3x and the US Chemicals industry average of 26.6x, while the share price of US$597.13 also sits well below the provided DCF fair value of US$1,295.86. Supporters of a bullish view point to this gap as potential mispricing, and the numbers do line up with that idea, although they have to weigh it against the softer trailing earnings trend.\n     The combination of a 13.4x P/E and a trailing 12 month EPS of US$44.44 explains why the DCF fair value of US$1,295.86 is well above the current US$597.13 share price, which is about 53.9% lower than that estimate. On top of that, a 2.01% dividend yield and a high level of debt mean bulls are effectively arguing that the low multiples more than compensate for leverage and the recent margin compression.    Curious how others are weighing that low P/E against the recent dip in margins and net income, and what they think it means for the longer term story around NewMarket, then it is worth checking how the full community narrative ties these pieces together: 📊 Read the full NewMarket Consensus Narrative.  Next Steps Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on NewMarket's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move. See What Else Is Out There NewMarket’s weaker recent quarters, softer margins and trailing net income slipping below the prior year all highlight that earnings quality has become a concern. If this softer profit trend has you wanting sturdier earnings power, check out the 55 high quality undervalued stocks to quickly spot companies where fundamentals and pricing may look more compelling today.  This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.Valuation is complex, but we're here to simplify it.Discover if NewMarket might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.Access Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. 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