International Flavors & Fragrances Inc.

(New York Stock Exchange)
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Bullish +75

Is International Flavors & Fragrances (IFF) Offering Value After Years Of Share Price Weakness - Sahm

AI-generated analysis

πŸ“‰ International Flavors & Fragrances (IFF) stock has faced years of share price weakness, currently trading at $71.14 per share.

πŸ’° A Discounted Cash Flow (DCF) model using a 2 Stage Free Cash Flow to Equity approach estimates IFF's intrinsic value at approximately $119.22 per share.

πŸ“Š The significant gap between the estimated intrinsic value and current price implies the stock is trading at a roughly 40.3% discount to the DCF estimate.

πŸ’΅ Latest twelve-month free cash flow is about $345.5 million, with analysts projecting free cash flow to reach $1.15 billion by 2028.

πŸ“ˆ The DCF model extrapolates these projections further out to 2035 using gradually moderating growth assumptions.

πŸ’Ό IFF currently trades on a Price-to-Sales (P/S) multiple of 1.67x, which is below the industry average of 1.11x and peer group average of 2.34x.

🎯 Simply Wall St provides a proprietary "Fair Ratio" P/S multiple of 1.88x, suggesting shares are trading below this tailored anchor point.

πŸ—£οΈ The article introduces "Narratives" as a tool that allows investors to combine fundamental data with management's stories and forecasts to determine fair value.

πŸ”„ These Narratives automatically update their Fair Value when new information such as earnings reports or guidance updates becomes available.

🧠 Community examples show varying analyst views on IFF, with Fair Values assigned ranging from $77.61 to $US$100.00 depending on assumptions.

βš–οΈ A conservative narrative view assigns a US$77.61 fair value compared to today's US$71.14 share price, suggesting limited upside in that scenario.

πŸ›‘οΈ An optimistic narrative view assigns a US$100.00 fair value, which is closer to the $119.22 derived from the formal DCF model.

⚠️ The analysis relies on historical data and unbiased methodology but does not constitute financial advice or a recommendation to buy or sell.

πŸ“… Copyright information indicates the content is attributed to Sahm Capital Financial Company dated 2026.

Bullish Signals
  • IFF's latest twelve-month free cash flow stands at approximately $345.5 million, with explicit analyst forecasts projecting this figure to reach $1.15 billion by 2028.
  • Valuation models suggest the stock is trading at a 40.3% discount to its estimated intrinsic value of $119.22 per share, indicating significant potential upside from the current price of $71.14.
  • The company trades at a Price-to-Sales multiple of 1.67x, which is below its proprietary 'Fair Ratio' of 1.88x and offers value relative to peers trading at 2.34x.
  • Community narratives reflect optimism in the stock's potential, with one user assigning a fair value of $100.00, well above the current market price.
Risk Factors
  • Free cash flow growth is highly leveraged to long-term extrapolations extending to 2035, introducing significant uncertainty regarding the sustainability of projections beyond 2028.
  • Share price has shown persistent weakness over years, indicating sustained investor skepticism that may not be fully reflected in current valuation metrics.
  • Community-driven narrative valuations vary wildly between US$77.61 and US$100.00, highlighting a high degree of disagreement on future earnings potential and risk assumptions.
  • The analysis relies solely on historical data and analyst forecasts without incorporating recent price-sensitive company announcements or qualitative material that could impact the business.
  • Valuation models ignore investor-specific objectives and financial situations, which may lead to misalignment between calculated 'intrinsic value' and individual risk tolerance.
Full Analysis
Simply Wall St analysis suggests International Flavors & Fragrances (IFF) may be undervalued based on a Discounted Cash Flow (DCF) model, projecting an intrinsic value of approximately $119.22 per share. This estimate stands in contrast to the company's recent share price of $71.14, implying a potential 40.3% discount. The DCF methodology utilizes a two-stage free cash flow to equity approach, noting that while the latest twelve-month free cash flow was about $345.5 million, analysts forecast this figure reaching $1.15 billion by 2028. The model extrapolates this growth path out to 2035 with moderating assumptions, suggesting potential upside if these projections and the required rate of return hold true. Valuation is also assessed through Price-to-Sales (P/S) multiples, where IFF currently trades at 1.67x sales. This figure is noted as being below the Chemicals industry average of 1.11x and significantly below the peer group average of 2.34x. Simply Wall St calculates a proprietary "Fair Ratio" P/S multiple of 1.88x for IFF, which accounts for specific factors like earnings growth and profit margins rather than relying solely on industry averages. Comparing the current 1.67x valuation against this 1.88x fair ratio indicates the stock is trading below its tailored modelled level. The platform also highlights community-driven narratives that generate varying Fair Value estimates, ranging from US$77.61 to US$100.00, further illustrating divergent views on the company's future earnings potential and profit margins relative to today's $71.14 market price. The article emphasizes that these valuations are based on historical data and analyst forecasts using an unbiased methodology provided by Sahm Capital Financial Company. The analysis does not factor in latest price-sensitive announcements or qualitative material and is not intended as financial advice, a buy or sell recommendation, or tailored to specific investor objectives. The content concludes with a disclaimer stating that Simply Wall St holds no position in any of the mentioned stocks and directs readers to their community platform for further discussion on IFF's narrative-based valuation stories.