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IFF: How Much Upside Do Analysts See?

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Analysts’ consensus

Analysts’ interest in International Flavors and Fragrances (IFF) has declined since the beginning of 2018. Currently, there are 12 analysts actively tracking the company. Among the 12 analysts, 42% recommended a “buy,” 42% recommended a “hold,” and 16% recommended a “sell.” Analysts seem to be widely divided about the stock.

Analysts’ consensus on International Flavors and Fragrances indicates a target price of $149.03, which implies a return potential of 3.2% over the closing price as of October 30. In the past three months, analysts have made an upward revision to the consensus target price.

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International Flavors and Fragrances’ second-quarter earnings beat analysts’ estimates. The trend will likely continue in the third-quarter earnings as well. International Flavors and Fragrances completed the acquisition of Frutarom. The impact is expected to be reflected starting in the fourth quarter. Increased raw material prices are expected to remain a big concern for International Flavors and Fragrances. As a result, most of the investors have recommended a “buy” or “hold.”

Individual brokerage firms’ views

  • BNP Paribas rated International Flavors and Fragrances as “neutral” and recommended a target price of $130. However, the stock is already trading 11.1% above the target price as of October 30.
  • Argus downgraded International Flavors and Fragrances to a “hold” from a “buy.” However, Argus didn’t provide a target price for International Flavors and Fragrances.
  • Deutsche Bank (DB) rated International Flavors and Fragrances as a “buy.” The brokerage firm recommended a target price of $154.00, which implies a return potential of 6.7% over the closing price on October 30.

Investors could consider the Invesco DWA Basic Materials Momentum ETF (PYZ), which invests 2.7% of its portfolio in International Flavors and Fragrances as of October 30. The fund also provides exposure to FMC (FMC) and LyondellBasell (LYB) with weights of 4.0% and 3.9%, respectively.

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