Assessing Givaudan's (SWX:GIVN) Valuation Following J.P. Morgan Downgrade on Prestige Fragrance Slowdown

J.P. Morgan’s recent downgrade of Givaudan (SWX:GIVN) has sparked discussion among investors. The move comes as the fine fragrance segment, especially prestige fragrances, faces a slowdown. This slowdown is likely to weigh on growth projections for 2026.

See our latest analysis for Givaudan.

While Givaudan’s participation at recent industry conferences has kept it in the spotlight, the market hasn’t been kind this year. After a tough stretch, the stock shows a year-to-date share price return of -15.3%, and the 1-year total shareholder return is down 23.2%. Despite this, Givaudan’s three-year total shareholder return stands at a healthy 24.6%, which underscores longer-term resilience even as short-term momentum cools.

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But with the share price now nearly 20% below analyst targets and recent growth concerns weighing on sentiment, could Givaudan be trading at an attractive discount, or is the market already factoring in any future upside?

Most Popular Narrative: 16% Undervalued

At CHF 3,341, Givaudan shares are well below the narrative-derived fair value of CHF 3,996. This gap is catching investors’ attention. This pricing difference highlights the central debate: do Givaudan’s projected growth drivers stand up to market skepticism, or is there hidden value waiting to be unlocked?

*The company continues to outpace industry peers, in part due to its innovation pipeline. Launches of sustainable, natural ingredients (for example, FDA-approved color solutions and algae-derived beauty actives) directly align with consumer shifts toward health, wellness, and clean label products, supporting both top-line growth and potential margin expansion.*

Read the complete narrative.

What’s behind this bold valuation call? It hinges on major revenue and profit upgrades, as well as a future PE ratio that would surprise most. Craving the details? Uncover the forecast assumptions giving Givaudan this edge.

Result: Fair Value of $3,996 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ongoing margin pressure from higher input costs and negative free cash flow could quickly shift the outlook if these trends persist.

Find out about the key risks to this Givaudan narrative.

Another View: Multiples Tell a Different Story

A look at Givaudan’s price-to-earnings ratio puts recent optimism under the spotlight. At 28.2x, the shares are noticeably more expensive than the European chemicals industry average of 17.1x and a peer average of 20.6x. The fair ratio, seen at 17.8x, suggests the current price leaves little margin for disappointment. Could the market be overestimating Givaudan's earnings power?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Givaudan Narrative

If you see things differently, or want to dig deeper into the numbers on your own terms, you can build a personal thesis and shape your own view in just a few minutes. Do it your way

A great starting point for your Givaudan research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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