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International Flavors & Fragrances Inc IFF

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Stock XNYS Rating as of
$85.14 −0.29 (0.34%)
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As of Delayed Price Closed
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Company Report

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International Flavors & Fragrances: Pharma Solutions Business Will Be Sold to Roquette

Seth Goldstein

International Flavors & Fragrances announced the sale of the company's pharma solutions business to Roquette for $2.85 billion, which we view as a fair price for the business. We assume IFF will receive $2.4 billion in proceeds after taxes and fees. Having updated our model to incorporate the deal, we maintain our $130 fair value estimate. Our wide moat rating is also unchanged. The stock was down 2% at the time of writing. At current prices, we view IFF as significantly undervalued, with the stock trading in 4-star territory and less than 65% of our fair value estimate.

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Price vs Fair Value

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IFF is trading at a 34% discount.
Price
$85.43
Fair Value
$375.00
Uncertainty
High
1-Star Price
$514.30
5-Star Price
$79.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

As the largest specialty ingredients producer globally, IFF holds an enviable portfolio of market-leading products spanning multiple industries.

Bears

IFF overpaid for the Frutarom and DuPont nutrition and biosciences acquisitions, leading to shareholder value destruction.

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Trading Information

Previous Close Price
$85.43
Day Range
$84.19–85.52
52-Week Range
$62.11–97.49
Bid/Ask
$81.00 / $87.40
Market Cap
$21.74 Bil
Volume/Avg
1.1 Mil / 2.3 Mil

Key Statistics

Price/Earnings (Normalized)
36.55
Price/Sales
1.89
Dividend Yield (Trailing)
3.33%
Dividend Yield (Forward)
1.88%
Total Yield
3.32%

Company Profile

International Flavors & Fragrances is the largest specialty ingredients producer globally. The company sells 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.
Sector
Basic Materials
Industry
Specialty Chemicals
Stock Style Box
Mid Value
Total Number of Employees
21,500
Website
https://www.iff.com

Competitors

Valuation

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Metric
IFF
NSIS B
SY1
Price/Earnings (Normalized)
 36.5531.0240.83
Price/Book Value
 1.497.704.01
Price/Sales
 1.896.023.08
Price/Cash Flow
 22.7624.9621.89
Price/Earnings
IFF
NSIS B
SY1

Financial Strength

Metric
IFF
NSIS B
SY1
Quick Ratio
 0.740.761.54
Current Ratio
 1.671.302.89
Interest Coverage
 −5.6323.085.75
Quick Ratio
IFF
NSIS B
SY1

Profitability

Metric
IFF
NSIS B
SY1
Return on Assets (Normalized)
 0.70%11.42%4.34%
Return on Equity (Normalized)
 1.40%23.56%9.53%
Return on Invested Capital (Normalized)
 1.90%19.08%6.39%
Return on Assets
IFF
NSIS B
SY1
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