Last Update 21 Jan 26

Fair value Decreased 1.86%

SY1: Margin And P/E Assumptions Will Support Future Upside Despite Impairment

Analysts have nudged their fair value estimate for Symrise slightly lower to about €97.11 from €98.95, reflecting modestly softer revenue growth assumptions, a slightly higher discount rate, a small adjustment to future P/E expectations, and a marginally higher profit margin, in line with recent Street price target trims to €105 and €91.60.

Analyst Commentary

Bullish Takeaways

Bullish analysts continue to rate the shares positively even after trimming price targets, which signals confidence that current levels still leave room for execution on the existing business plan.
The higher target of €105, compared with the fair value estimate of about €97.11, implies that some analysts see upside potential if the company delivers on growth and profitability expectations.
Retaining an Overweight stance suggests these analysts view recent adjustments to assumptions on discount rates, P/E and margins as fine tuning rather than a change in the long term thesis.
Trims of only a few euros on prior targets indicate that, in their view, valuation headwinds are incremental rather than a sign of a major reset in expectations.

Bearish Takeaways

Bearish analysts keeping a Hold rating alongside a reduced target of €91.60 highlight ongoing caution about how much the current share price already reflects future growth and margin assumptions.
The lower target relative to the fair value estimate underlines concern that execution risks, including achieving projected profitability, may justify a more conservative stance.
Repeated trimming of targets by a few euros signals that some analysts see limited scope for re rating until there is clearer evidence on revenue momentum and margin resilience.
The Hold view also points to a perception that risk and reward are more evenly balanced, with less conviction that the shares are mispriced on current P/E expectations.

What's in the News

Symrise is in advanced talks with potential buyers to sell its terpenes business through a structured bidding process, with IFRS 5 to be applied to this unit as held for sale (company event).
The company plans to record a non cash impairment charge of about €145 million on the terpenes business in the fourth quarter of 2025, which the company states will affect EBIT (company event).
Symrise expects a non cash impairment of its investment in Sweden listed Swedencare AB of about €150 million in the fourth quarter of 2025, which the company indicates will affect EBITDA (company event).
According to the company, the combined impairments related to the terpenes business and Swedencare AB are expected to lead to a material deviation from previously published guidance and current capital market expectations for the 2025 financial year (company event).

Valuation Changes

The fair value estimate has edged down slightly from about €98.95 to about €97.11 per share.
The discount rate has moved marginally higher from about 5.67% to about 5.69%.
The revenue growth assumption has been trimmed from about 3.63% to about 3.19%.
The net profit margin assumption has been raised modestly from about 11.27% to about 11.39%.
The future P/E assumption has eased slightly from about 26.0x to about 25.5x.

Operational efficiency initiatives, portfolio optimization, and disciplined cost controls are driving lasting margin improvement, free cash flow, and overall earnings quality.
Focus on R&D, natural ingredient innovation, and emerging market expansion positions Symrise for premium pricing and resilient, above-market long-term growth.
Competitive pressures, macroeconomic headwinds, and weaker end-market demand are likely to constrain growth and margins despite cost-saving and transformation initiatives.

Catalysts

About Symrise

Operates as a supplier of fragrances, flavorings, cosmetic base materials and active ingredients, and functional ingredients and solutions in Europe, Africa, the Middle East, North America, the Asia Pacific, and Latin America.What are the underlying business or industry changes driving this perspective?

Symrise is executing a multi-year transformation focused on operational efficiency, portfolio optimization, and disciplined cost management, which is already yielding substantial margin improvements (notably, a gross margin increase of 250 bps and an EBITDA margin uplift), laying the groundwork for structurally higher net margins and improved earnings compounding.
Ongoing and targeted cost savings measures (€40 million in 2025, following €50 million in 2024) and optimized procurement strategies are expected to deliver sustainable operating leverage and support both margin expansion and stronger free cash flow generation.
Symrise's continued investment in R&D, innovation, and proprietary launches in natural and functional ingredients targets growing consumer demand for health-conscious, sustainable, and science-backed solutions, positioning the firm to capture secular volume growth and premium pricing, directly benefiting revenue and margins over the long term.
Expansion in high-growth emerging markets such as Latin America and Asia Pacific, alongside a proactive approach to portfolio management (divestments of non-core, lower-margin businesses), is expected to boost top-line growth, increase geographic diversification, and strengthen resilience against developed market stagnation.
As global customers increasingly outsource ingredient complexity due to rising demand for product innovation, personalization, and regulatory-driven reformulations, Symrise's specialty expertise and enhanced customer relationships are likely to translate into above-market revenue growth and defend against commoditization risks.

Symrise Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Symrise's revenue will grow by 4.9% annually over the next 3 years.
Analysts assume that profit margins will increase from 10.2% today to 11.6% in 3 years time.
Analysts expect earnings to reach €666.0 million (and earnings per share of €4.75) by about September 2028, up from €506.9 million today. The analysts are largely in agreement about this estimate.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 26.9x on those 2028 earnings, up from 23.0x today. This future PE is greater than the current PE for the GB Chemicals industry at 22.0x.
Analysts expect the number of shares outstanding to decline by 0.08% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 5.5%, as per the Simply Wall St company report.

Symrise Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The company is experiencing a normalization and slowdown in several key end markets, notably in Pet Nutrition and Pet Food, due to cautious consumer sentiment and price pressures, which may dampen segment revenue growth and compress net margins in the near to mid-term.
Management has revised down its organic growth guidance for 2025 from 5%-7% to 2%-5%, reflecting a more challenging global demand environment and slower market growth expectations; sustained slower growth could limit revenue and earnings upside potential.
Increasing regional and local competition, particularly in pet and nutrition markets, as well as pressure from private label brands, could erode Symrise's pricing power and market share, resulting in pressured revenues and potentially lower net margins.
Currency headwinds and macroeconomic uncertainty in regions like North America have resulted in negative FX impacts and weaker organic growth, highlighting ongoing exposure to global economic and political volatility that could impact overall earnings and free cash flow.
The company's transformation and cost savings initiatives, while driving margin improvement, also require reinvestment into digitalization, R&D, and organizational change, which introduces execution risk and could put pressure on near-term margins if savings do not sufficiently offset increased investment or if efficiency gains are not fully realized.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of €109.803 for Symrise based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of €130.0, and the most bearish reporting a price target of just €90.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be €5.8 billion, earnings will come to €666.0 million, and it would be trading on a PE ratio of 26.9x, assuming you use a discount rate of 5.5%.
Given the current share price of €83.44, the analyst price target of €109.8 is 24.0% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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