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International Flavors & Fragrances Inc IFF

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Morningstar’s Analysis

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Raising Int'l Flavors & Fragrances' FVE to $140 on Improved Near-Term Outlook; Shares Fairly Valued

Seth Goldstein, CFA Senior Equity Analyst

Analyst Note

| Seth Goldstein, CFA |

International Flavors & Fragrances reported solid first-quarter results as adjusted EBITDA was up 4% versus the prior year quarter due largely to rebounding volumes and lower costs. We increased our near-term outlook for the scent segment to account for a faster-than-expected rebound in fine fragrances. We have also slightly lowered our 2021 profit margin forecast in the nourish segment to incorporate the effects of higher raw materials and transportation costs. We think IFF will be able to completely pass along the higher expenses over time. As such, we expect higher prices will restore margins in 2022.

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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 Mar 31, 2021
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 13,700