International Flavors & Fragrances (IFF): Assessing Valuation Following POWERFRESH ACE 2000 Launch in Bakery Solutions

International Flavors & Fragrances (IFF) just introduced POWERFRESH ACE 2000, a new enzyme solution designed to address challenges facing U.S. bakeries. The company is responding with innovation as bakeries seek ways to deliver bread that stays soft and fresh longer, especially as ingredient prices put pressure on margins. POWERFRESH ACE 2000 aims to provide operational improvements by reducing returns and waste, while meeting consumer demand for a loaf that remains fresh with the right texture for more days on the shelf.

This product launch comes as IFF’s stock is experiencing a period of moderate volatility. Shares have slipped 11% over the past month and are down 18% so far this year, underperforming both the broader market and some sector peers. Last year’s total return reflected a 31% decline. Moves like the POWERFRESH launch may influence expectations around the company’s trajectory and suggest potential for improved market share and operational leverage, though financial results continue to be affected by ongoing headwinds.

Against this backdrop, investors are considering whether the current stock price already reflects expectations of a turnaround resulting from this innovation, or if the market is still underestimating IFF’s future growth prospects.

Most Popular Narrative: Narrative 19.3% Undervalued

According to community narrative, International Flavors & Fragrances is viewed as significantly undervalued, suggesting upside potential if market expectations align with analyst assumptions.

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.

Wondering why analysts forecast such a sharp turnaround? It comes down to pivotal growth drivers hiding in plain sight. The secret sauce involves aggressive profit targets and a valuation model that challenges conventional thinking. Interested in the bold numbers and ambitious timeframes supporting this optimistic outlook? The full story behind these projections may surprise you.

Result: Fair Value of $84.25 (UNDERVALUED)

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

However, ongoing weakness in key regions or a lack of breakthrough from new products could present challenges to expectations for a rapid turnaround at IFF.

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

Another View: SWS DCF Model Perspective

Looking through another lens, our DCF model takes a different approach and also points to IFF appearing undervalued. However, can discounted cash flow forecasts be trusted more than traditional valuation ratios?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out International Flavors & Fragrances for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own International Flavors & Fragrances Narrative

If you would rather chart your own course or dig deeper into the data before forming a view, you can create your own analysis in just a few minutes, and 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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