Shares of International Flavors & Fragrances (NYSE:IFF) are under pressure today after the company announced a weak set of fourth-quarter results, slashed its dividend by nearly 50%, and took a non-cash impairment charge of about $2.6 billion. IFF provides flavor and fragrance solutions in the areas of cosmetic, beverage, health, and food products.
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In Q4, IFF’s revenue declined by nearly 5% year-over-year to $2.7 billion. EPS of $0.72 lagged expectations by $0.04. The quarter was marked by sequentially improving volume trends and stable pricing for the company. While sales in the Scent and Health & Biosciences segments ticked higher, its Nourish and Pharma Solutions segments witnessed a decline. For Fiscal Year 2023, IFF’s top line contracted by 8% to $11.48 billion.
For Fiscal Year 2024, IFF expects sales in the range of $10.8 billion to $11.1 billion. Amid a challenging macroeconomic environment, the company expects a pricing decline of about 2.5%, with volume growth in the flat to 3% bracket. Adjusted operating EBITDA during this period is seen landing between $1.9 billion and $2.1 billion.
A combination of higher interest rates, cost inflation, and lower business projections have prompted IFF to record a non-cash impairment charge of $2.6 billion in its Nourish segment. Additionally, the company is slashing its quarterly dividend by 50% to $0.40 per share. The IFF dividend is payable on April 10 to investors of record on March 22.
What Is the Price Target for IFF?
Today’s price decline comes after a nearly 13% rise in the company’s share price over the past three months. Overall, the Street has a Moderate Buy consensus rating on International Flavors alongside an average price target of $86.10. However, it’s worth noting that estimates will likely change following today’s earnings report.
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