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Sensient Technologies Corp SXT

Rating as of

Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Raising Fair Value Estimate to $71 as Sensient's First-Quarter Results Show Recovery Underway

Seth Goldstein, CFA Senior Equity Analyst

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.

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Company Profile

Business Description

Sensient Technologies manufactures and markets natural and synthetic colors, flavors, and flavor extracts. The company has a widespread network of facilities around the globe, and its customers operate across a variety of end markets. Sensient’s offerings are predominantly applied to consumer-facing products, including food and beverage, cosmetics and pharmaceuticals.

Contact
777 East Wisconsin Avenue
Milwaukee, WI, 53202-5304
T +1 414 271-6755
Sector Basic Materials
Industry Specialty Chemicals
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 3,948