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International Flavors & Fragrances Inc IFF

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

IFF Shares Turn Sour on 2021 Guidance Update, but We're Maintaining Our $140 FVE

Seth Goldstein, CFA Senior Equity Analyst

Analyst Note

| Seth Goldstein, CFA |

On Sept. 16, International Flavors & Fragrances released updated guidance for higher sales growth on strong demand. However, it also lowered its EBITDA margin outlook due to higher raw materials and logistics costs. Management expects to be able to pass on the higher costs through price increases by the end of the year. We think IFF will be able to increase prices, and as such, our long-term outlook is intact. Having updated our model to reflect the near-term changes, we maintain our $140 fair value estimate. Our wide moat rating is also unchanged. 

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Company Profile

Business Description

International Flavors & Fragrances produces ingredients for the food, beverage, health, household goods, personal care, and pharmaceutical industries. The company makes proprietary formulations, partnering with customers to deliver custom solutions. The nourish segment, which generates roughly half of revenue, is a leading flavor producer and also sell texturants, plant-based proteins, and other ingredients. The health and biosciences business, which generates around one fourth of revenue, is a global leader in probiotics and enzymes. IFF is also one of the leading fragrance producers in the world. The firm also sells pharmaceutical ingredients such as excipients and time-release polymers.

Contact
521 West 57th Street
New York, NY, 10019-2960
T +1 212 765-5500
Sector Basic Materials
Industry Specialty Chemicals
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 13,700

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