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Balchem Corp BCPC

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Morningstar’s Analysis

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5-Star Price

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Raising Balchem's FVE to $108 on Improved Near-Term Outlook; Shares Remain Overvalued

Seth Goldstein, CFA Senior Equity Analyst

Analyst Note

| Seth Goldstein, CFA |

Balchem reported solid third-quarter earnings as adjusted EBITDA was up 9% versus the prior-year quarter driven by strong sales growth partially offset by cost inflation. We have increased our near-term outlook for the company as we expect strong demand will continue to drive higher sales. As with many specialty chemicals companies in our coverage, Balchem is currently dealing with cost inflation, which includes higher expenses for raw materials, logistics, and distributions. As we forecast in our second-quarter earnings update, Balchem should continue to see temporarily depressed margins.

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Company Profile

Business Description

Balchem manufactures ingredients, nutrients, and chemicals for a wide variety of industries, including human nutrition, animal nutrition, and oil and gas. The company offers a wide variety of product lines, with some highly customized and others commodity-oriented. After the 2014 acquisition of SensoryEffects, the human nutrition and health segment now generates the largest share of companywide revenue and profits.

Contact
52 Sunrise Park Road
New Hampton, NY, 10958
T +1 845 326-5600
Sector Basic Materials
Industry Specialty Chemicals
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 1,305