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Balchem Corp BCPC

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Raising Balchem's Fair Value Estimate to $97 on Higher Near-Term Outlook; Shares Overvalued

Seth Goldstein, CFA Senior Equity Analyst

Analyst Note

| Seth Goldstein, CFA |

Balchem generated solid first-quarter results as segment earnings before taxes were up 22% year on year. The growth was driven largely by higher profits in the human nutrition and health (HNH) segment, partially offset by lower profits in the animal nutrition and health (ANH) and specialty products segments. In light of the first-quarter results, we have slightly increased our near-term outlook in the HNN segment to account for higher revenue growth than we had previously forecast. Our long-term outlook is unchanged. Having updated our model to reflect these changes, we raise our Balchem fair value estimate to $97 per share from $93. Our narrow-moat rating is unchanged.

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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 Mar 31, 2021
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 1,353

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