About NEWMARKET CORP
NewMarket Corporation, through its subsidiaries, engages in the petroleum additives business. The company offers lubricant additives for use in various vehicle and industrial applications, including engine oils, transmission fluids, off-road powertrain and hydraulic systems, gear oils, hydraulic oils, turbine oils, and other applications where metal-to-metal moving parts are utilized; engine oil additives designed for passenger cars, motorcycles, on and off-road heavy duty commercial equipment, locomotives, and engines in ocean-going vessels; driveline additives designed for products, such as transmission fluids, axle fluids, and off-road powertrain fluids; and industrial additives designed for products for industrial applications consisting of hydraulic fluids, grease, industrial gear fluids, and industrial specialty applications, such as turbine oils. It also provides fuel additives that are used to enhance the oil refining process and the performance of gasoline, diesel, biofuels, and other fuels to industry, government, original equipment manufacturers, and individual customers.
In addition, the company engages in the antiknock compounds business, as well as contracted manufacturing and services activities; and owns and manages a real property in Virginia. It operates in North America, Latin America, the Asia Pacific, Europe, the Middle East, Africa, and India. NewMarket Corporation was founded in 1887 and is headquartered in Richmond, Virginia.
NEU operates in the Manufacturing | Chemicals | headquartered in Richmond, Virginia | approximately 2,060 employees | led by CEO Thomas E. Gottwald.
The $7.8B question: What happens when a company this good becomes this expensive?
In the constellation of American capitalism, certain companies shine brighter than others — not because they are inherently more valuable, but because they have positioned themselves at the nexus of forces that shape the economy. NEWMARKET CORP is one such company.
At $7.8B in market capitalization, NEWMARKET CORP (NEU) currently ranks #34 in our quantitative model, with a composite score of 79.3/100. That places it firmly in "Strong Buy" territory — our highest conviction rating.
But here's the thing about stocks priced for perfection: They leave no room for error.
The Numbers That Matter
Let's start with what's undeniably true. Our 6-factor model gives NEU the following scores:
| Factor | Score | Weight | Assessment |
|---|---|---|---|
| Quality | 81/100 | 30% | Exceptional |
| Value | 72/100 | 15% | Fair |
| Momentum | 74/100 | 25% | Accelerating |
| Investment | 32/100 | 10% | Low |
| Stability | 85/100 | 10% | Fortress |
| Short Interest | 57/100 | 10% | Normal |
The quality score of 81/100 is the headline here. It reflects profitability metrics that would make most CFOs weep with envy:
- ROE: 25.4%
- Net Margin: 14.5%
- Gross Margin: 30.4%
These aren't just good numbers. They're the kind of numbers that make NEU a "must-own" stock for institutional portfolios.
The Bull Case
"If you could design a business in a laboratory, it would look something like NEU."
The bull case writes itself:
- Quality is persistent. Academic research shows high-quality stocks outperform by 4-6% annually over long periods. NEU is quality defined.
- Momentum is real. With a momentum score of 74/100, the stock has been recognized by the market — and momentum tends to persist.
- The moat is deep. Companies with these margins don't lose them easily. The competitive position is entrenched.
The Bear Case
But here's what keeps value investors up at night:
- Valuation compression risk. At current levels, the stock is priced for continued perfection. Any stumble — a missed quarter, a competitive threat, a macro slowdown — could compress the multiple from 17.4x to the low 20s. That's a 20-30% decline without anything fundamentally "wrong."
- The crowded trade problem. When everyone owns a stock, who's left to buy? Momentum works until it doesn't.
- Mean reversion. Trees don't grow to the sky. At some point, growth decelerates.
The Valuation Framework
| Scenario | Assumption | Fair Value | Upside/Downside |
|---|---|---|---|
| Bear | Multiple compression to 20x | -20% | Downside |
| Base | Current trajectory continues | +10-15% | Modest upside |
| Bull | Momentum accelerates | +30-40% | Significant upside |
The risk-reward is ... fine. Not exceptional. Not terrible. Just fine.
The Bottom Line
NEWMARKET CORP is exactly what it appears to be: a high-quality business with strong momentum trading at a premium price. Whether that's attractive depends entirely on what kind of investor you are.
For long-term, buy-and-hold investors, NEU is a core holding. For value investors or short-term traders, look elsewhere.
The company is priced for perfection — and in markets, as in life, perfection is a fragile thing.
⭐⭐⭐⭐⭐ Rating: 5-Star Strong Buy
Score: 79.3/100 | Rank: #34 of 3,571 stocks
Sector: Materials
This analysis reflects the views of Blank Capital Research as of February 16, 2026. It is not investment advice. Past performance does not guarantee future results.