International Flavors & Fragrances (IFF): Exploring Value Opportunities After Recent Share Price Drop

International Flavors & Fragrances (IFF) stock has been under pressure over the past few months, prompting investors to re-examine the company’s outlook as shares decline. The recent drop invites questions about where value might emerge.

See our latest analysis for International Flavors & Fragrances.

It has been a tough stretch for International Flavors & Fragrances shareholders, as the stock’s 1-year total shareholder return sits at -40.72%. While the latest share price of $59.55 reflects cautious sentiment, the downward momentum has been building all year. Shares have been pulled sharply off their highs, and longer-term performance also remains under pressure.

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With shares trading well below analyst price targets and the company showing signs of improving profitability, the question is whether International Flavors & Fragrances is now a value play or if the market has already priced in any future growth.

Most Popular Narrative: 28.7% Undervalued

With International Flavors & Fragrances closing at $59.55, the most widely followed narrative suggests the stock trades well below its $83.49 fair value. This sets the stage for a potentially compelling recovery story.

Recent divestitures of commodity businesses (e.g., Pharma Solutions, Soy Crush, Concentrates, Lecithin) and the ongoing strategic evaluation of the Food Ingredients segment are increasing IFF's focus on differentiated, higher-margin, innovation-driven products. This supports future margin expansion and higher earnings quality.

Read the complete narrative.

What is fueling this fresh valuation? The narrative centers on a new product mix, aggressive margin goals, and a bold timeline for profit transformation. Which numbers actually underpin that $83+ target, and how big are the bets on future growth? Uncover the full story behind these headline predictions.

Result: Fair Value of $83.49 (UNDERVALUED)

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

However, persistent weakness in key markets and pressure from low-cost competitors could limit recovery and keep International Flavors & Fragrances’ valuation under pressure.

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

Another View: Multiples Tell a Different Story

While the fair value estimate highlights a deep discount, looking at valuation multiples paints a more nuanced picture. International Flavors & Fragrances trades at a price-to-sales ratio of 1.4x, which is higher than the US Chemicals industry average of 1.2x but lower than the peer group average of 2x. Compared to its fair ratio of 1.6x, the stock appears reasonably valued, yet sits above the broader sector. Does this balance signal a hidden opportunity, or does it simply reflect industry risk?

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

Build Your Own International Flavors & Fragrances Narrative

If this angle doesn’t align with your own perspective or you’d rather start with a fresh analysis, you can shape your own outlook in just a few 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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