Symrise: Short-Term Profitability Headwinds Do Not Derail Our Long-Term Thesis; Shares Attractive

We confirm our EUR 108 fair value estimate for wide-moat Symrise after reflecting the recent 2023 guidance update in our forecast. The company expects stronger organic sales growth for the year, above the upper end of the previous guidance range of 5%-7%, but softer adjusted EBITDA margin of 19%-19.5%, compared with the previous guidance and our forecast of around 20%. These two developments have a partially offsetting impact and, together with an adjustment for the time value of money, leave our fair value estimate unchanged. Despite the strong organic growth, negative currency translation effects are expected to weigh heavily on the year’s top line and profitability. Detailed 2023 full-year results will be released March 6. At current levels, we believe the share price still offers upside of around 10% for patient investors.