International Flavors & Fragrances (IFF): Assessing Valuation After New BASF Partnership Targets Sustainable Innovation

International Flavors & Fragrances is teaming up with BASF to develop new enzyme and polymer technologies aimed at sustainable cleaning and personal care products. The move highlights a market shift toward environmentally responsible solutions.

See our latest analysis for International Flavors & Fragrances.

On top of the BASF partnership, International Flavors & Fragrances recently refreshed its board with two high-profile appointments, signaling a strategic push for change. Momentum is showing signs of a rebound in the short term with a 1-month share price return of 8.6%. However, the 1-year total shareholder return of -34% keeps the longer-term mood cautious as the company works to regain investor confidence.

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With shares trading roughly 24% below analyst price targets and almost 30% below intrinsic value, is International Flavors & Fragrances an overlooked bargain, or has the market already accounted for its prospects for recovery and growth?

Most Popular Narrative: 19.6% Undervalued

With International Flavors & Fragrances last closing at $65.91 and the most popular narrative assigning a fair value of $81.96, there is a notable disconnect between market price and consensus expectations. The story behind that gap centers on fundamental shifts in the business and bold assumptions for a turnaround.

Ongoing investments in R&D and capacity (especially in Health & Biosciences, Taste, and Specialty Fragrance Ingredients) are strengthening the company's innovation pipeline. Management expects these initiatives to accelerate revenue and profit growth beginning in 2026 and reaching full impact by 2027.

Read the complete narrative.

What is driving this bullish price target? The narrative is built on forecasts that rely on a powerful blend of profit margin expansion and aggressive turnaround initiatives. Curious about the future earnings leap and why the fair value is so much higher than today’s market price? The numbers and assumptions are anything but conservative.

Result: Fair Value of $81.96 (UNDERVALUED)

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

However, persistent softness in key markets and challenges in the Health segment could disrupt the expected turnaround and limit margin recovery.

Find out about the key risks to this International Flavors & Fragrances narrative.

Build Your Own International Flavors & Fragrances Narrative

If you see things differently or want to take a hands-on approach, you can dive into the numbers and assemble your own take in just minutes. Do it your way

A great starting point for your International Flavors & Fragrances research is our analysis highlighting 3 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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