Analyst Note
| Seth Goldstein, CFA |Sensient Technologies' first-quarter results reflected a clear path to a full postpandemic recovery. Adjusted operating income during the quarter was roughly flat year on year as favorable results in the flavors and extracts and Asia-Pacific segments were offset by continued weakness in the colors segment. With roughly 30% of colors sales coming from the personal care product end market, we expect the colors business to improve throughout 2021. As more people are vaccinated and begin to return to prepandemic activities, we expect sales to the personal care product end market will improve. Management maintained its 2021 guidance for adjusted EPS to be up mid to high single digits, which we think is achievable. With our outlook intact, we raise our fair value estimate to $71 per share from $70 due largely to the time value of money effects. Our narrow moat rating is unchanged.