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International Flavors & Fragrances (IFF)
NYSE:IFF
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International Flavors & Fragrances
(NYSE:IFF)
54Neutral
Positive Factors
Earnings Growth
Earnings growth is poised to accelerate following the Pharma divestiture, as this move should allow IFF to allocate cash in more accretive ways.
Organic Sales
Organic sales rose over 10% in fragrance ingredients and showed strong growth in other fragrance categories.
Negative Factors
EBITDA Estimates Reduction
The company is updating its 2025 and 2026 EBITDA estimates to lower figures than previously expected.
Foreign Exchange Impact
The guidance includes a 6% EBITDA headwind from foreign exchange, which is larger than expected.
Return on Equity
Return on Equity TTM is reported at -14.62%, indicating challenges in generating profit from shareholders' equity.
International Flavors & Fragrances (IFF) vs. S&P 500 (SPY)
Market Cap
$19.83B
Dividend Yield2.06%
Average Volume (3M)1.90M
Price to Earnings (P/E)82.0
Beta (1Y)0.84
Revenue Growth0.04%
EPS GrowthN/A
CountryUS
Employees22,400
SectorBasic Materials
Sector Strength61
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)0.95
Shares Outstanding255,735,000
10 Day Avg. Volume2,129,508
30 Day Avg. Volume1,903,088
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.73
Price to Cash Flow (P/CF)13.50
P/FCF Ratio13.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$96.38Price Target Upside24.31% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering13
International Flavors & Fragrances Business Overview & Revenue Model
Company DescriptionInternational Flavors & Fragrances (IFF) is a leading global creator of flavors and fragrances used in a wide variety of consumer products. The company operates across several sectors including food and beverage, home and personal care, and health and wellness. IFF's core products and services include the development and manufacturing of natural and synthetic flavor compounds, fragrance ingredients, cosmetic actives, and other specialty ingredients that are integral to the consumer goods industry.
How the Company Makes MoneyIFF makes money through its diverse portfolio of flavors, fragrances, and specialty ingredients, which are sold to manufacturers of consumer products worldwide. Its revenue model is based on the sale of these compounds to industries such as food and beverage, where it provides flavor solutions, and the personal care and household products sectors, where it offers fragrance and cosmetic solutions. Key revenue streams include long-term contracts with major consumer goods companies, proprietary product formulations, and innovation in sustainable and natural ingredients. Additionally, strategic partnerships and acquisitions enhance its market presence and technological capabilities, contributing significantly to its earnings.
International Flavors & Fragrances Financial Statement Overview
Summary
IFF shows signs of recovery with improved profitability and debt management. However, revenue stagnation and cash flow challenges present potential risks. The company is stabilizing post losses, but growth remains a concern.Income Statement
The income statement reveals mixed performance. Gross profit margin has improved from 32.06% in 2023 to 35.91% in 2024, indicating better cost management. However, with a net profit margin of 2.12% in 2024, the company still struggles with profitability, though this is an improvement from a significant net loss in 2023. Revenue has slightly increased from $11.48B in 2023 to $11.48B in 2024, showing stagnation. The EBIT margin improved to 6.67% in 2024 from 5.33% in 2023, indicating operational improvements.55
Neutral
Balance Sheet
The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.69 in 2024, reduced from 0.74 in 2023, indicating prudent debt management. Return on equity improved to 1.75% in 2024 from a negative in 2023, showing recovery potential. However, the equity ratio decreased to 48.39% in 2024 from 47.17% in 2023, suggesting a slight weakening in equity financing relative to assets.60
Neutral
Cash Flow
Cash flow analysis shows a decrease in free cash flow from $936M in 2023 to $607M in 2024, indicating challenges in cash generation. The operating cash flow to net income ratio improved, reflecting efficient cash generation relative to profit, but free cash flow to net income remains pressured by capital expenditures.50
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 11.48B | 11.48B | 12.44B | 11.66B | 5.08B | Gross Profit |
| 4.12B | 3.68B | 4.15B | 3.73B | 2.09B | EBIT |
| 766.00M | 612.00M | 1.09B | 585.00M | 566.48M | EBITDA |
| 1.60B | -996.00M | -110.00M | 1.80B | 897.67M | Net Income Common Stockholders |
| 243.00M | -2.56B | -1.84B | 268.00M | 365.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 469.00M | 703.00M | 493.00M | 715.00M | 656.84M | Total Assets |
| 28.67B | 30.98B | 35.39B | 39.68B | 13.56B | Total Debt |
| 9.51B | 10.80B | 10.97B | 11.40B | 4.41B | Net Debt |
| 9.04B | 10.10B | 10.48B | 10.69B | 3.76B | Total Liabilities |
| 14.76B | 16.34B | 17.60B | 18.45B | 7.14B | Stockholders Equity |
| 13.88B | 14.61B | 17.73B | 21.12B | 6.32B |
| Cash Flow | Free Cash Flow | |||
| 607.00M | 936.00M | -161.00M | 1.04B | 522.30M | Operating Cash Flow |
| 1.07B | 1.44B | 345.00M | 1.44B | 714.10M | Investing Cash Flow |
| 326.00M | 574.00M | 745.00M | -18.00M | -187.46M | Financing Cash Flow |
| -1.61B | -1.85B | -1.18B | -1.30B | -511.57M |
International Flavors & Fragrances Technical Analysis
Negative
77.53
Price Trends
82.59
Negative
85.59
Negative
92.03
Negative
Market Momentum
-1.12
Positive
36.60
Neutral
9.90
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IFF, the sentiment is Negative. The current price of 77.53 is below the 20-day moving average (MA) of 80.00, below the 50-day MA of 82.59, and below the 200-day MA of 92.03, indicating a bearish trend. The MACD of -1.12 indicates Positive momentum. The RSI at 36.60 is Neutral, neither overbought nor oversold. The STOCH value of 9.90 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IFF.
International Flavors & Fragrances Risk Analysis
International Flavors & Fragrances disclosed 30 risk factors in its most recent earnings report. International Flavors & Fragrances reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
International Flavors & Fragrances Peers Comparison
Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $13.79B | 19.99 | 31.75% | 1.98% | 4.68% | 40.68% | |
68 Neutral | $84.11B | 31.69 | 69.05% | 0.85% | 0.20% | 14.31% | |
65 Neutral | $25.13B | 18.57 | 19.13% | 2.43% | -4.59% | 11.09% | |
63 Neutral | $5.18B | 15.31 | 9.02% | 5.59% | -5.36% | -74.25% | |
57 Neutral | $2.66B | 21.03 | 0.18% | 2.87% | -4.35% | -115.63% | |
54 Neutral | $19.83B | 82.01 | 1.71% | 2.06% | 0.04% | ― | |
47 Neutral | $2.66B | -3.61 | -22.67% | 3.28% | 3.74% | -27.14% |
* Basic Materials Sector Average
Performance Comparison
IFF
International Flavors & Fragrances
77.53
-3.04
-3.77%
ASH
Ashland
57.25
-36.53
-38.95%
AVY
Avery Dennison
177.01
-36.63
-17.15%
FMC
FMC
41.75
-18.58
-30.80%
PPG
PPG Industries
112.98
-25.13
-18.20%
SHW
Sherwin-Williams Company
342.71
3.54
1.04%
International Flavors & Fragrances Earnings Call Summary
Earnings Call Date: Feb 18, 2025 | % Change Since: -9.87% | Next Earnings Date: May 12, 2025
Earnings Call Sentiment Positive
The earnings call highlighted a strong financial performance in 2024 with significant revenue and profitability growth. Strategic investments in biotechnology and operational improvements were emphasized as key drivers of success. However, challenges in the functional ingredients segment and adverse forex impacts were noted. Overall, the positive achievements in revenue growth and debt reduction outweighed the negatives.Highlights
Revenue Growth
International Flavors & Fragrances Inc. delivered $11.5 billion in sales for 2024, representing a 6% comparable currency-neutral growth.
Profitability Improvement
The company reported over $2.2 billion in adjusted operating EBITDA for 2024, representing 16% comparable growth.
Debt Reduction
Net debt to credit-adjusted EBITDA improved to 3.8 times at the end of 2024 from 4.5 times at the end of 2023.
Segment Performance
Nourish segment sales increased by 4% year over year, Health and Biosciences 6%, Scent 7%, and Pharma Solutions 12% on a comparable currency-neutral basis.
Strategic Investments
Increased emphasis on biotechnology and investments in R&D, commercial capabilities, and CapEx for high-growth, high-margin businesses.
Lowlights
Functional Ingredients Margin Pressure
Functional ingredients faced mid-single-digit volume growth, mostly offset by pricing actions.
Health and Biosciences EBITDA Decline
Comparable adjusted operating EBITDA for Health and Biosciences decreased by 3% due to strong year-ago comparables and business reinvestments.
Forex Impact
Foreign exchange expected to have approximately a 4% adverse impact on sales growth and a 6% adverse impact on adjusted operating EBITDA growth in 2025.
Company Guidance
During the International Flavors & Fragrances Inc. (IFF) earnings call for the fourth quarter and full year 2024, the company provided guidance for 2025, anticipating sales to range between $10.6 billion to $10.9 billion, reflecting comparable currency-neutral growth of 1% to 4%. Adjusted operating EBITDA for 2025 is expected to be between $2 billion to $2.15 billion, indicating 5% to 10% growth on a comparable currency-neutral basis. The company plans to increase investments in research and development, commercial capabilities, and capital expenditures, targeting approximately 6% of sales in CapEx, split between maintenance, deferred investment catch-up, growth investments, and digital transformation initiatives. IFF is also looking to complete the divestiture of Pharma Solutions by mid-2025, which is anticipated to have adverse impacts of approximately 5 percentage points on sales growth and 6 percentage points on adjusted EBITDA growth. The outlook includes assumptions about the operating environment normalizing relative to 2024, with expected modest pricing contributions and impacts from foreign exchange rates, particularly the euro, Brazilian real, and Argentine peso.International Flavors & Fragrances Corporate Events
Executive/Board Changes
IFF Executive Vice President Jennifer Johnson Resigns
Neutral
Mar 13, 2025
On March 12, 2025, Jennifer Johnson, the Executive Vice President, General Counsel, and Corporate Secretary of IFF, announced her resignation. She will remain with the company until July 1, 2025, to facilitate a smooth transition, and her departure is considered a qualifying event under IFF’s executive severance policy.
Executive/Board Changes
International Flavors & Fragrances Announces Leadership Change
Neutral
Feb 20, 2025
On February 20, 2025, International Flavors & Fragrances Inc. announced the upcoming departure of Simon Herriott, President of Health & Biosciences, effective March 31, 2025. Leticia Goncalves Lourenço will succeed him as President of the Health & Biosciences division starting March 1, 2025, marking a significant leadership change within the company.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.