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International Flavors & Fragrances Inc. (NYSE:IFF): What Does The Future Look Like?

Simply Wall St

On 30 June 2019, International Flavors & Fragrances Inc. (NYSE:IFF) announced its earnings update. Overall, analysts seem highly optimistic, with earnings expected to grow by a high double-digit of 60% in the upcoming year, against the historical 5-year average growth rate of -6.2%. By 2020, we can expect International Flavors & Fragrances’s bottom line to reach US$532m, a jump from the current trailing-twelve-month of US$333m. Below is a brief commentary on the longer term outlook the market has for International Flavors & Fragrances. For those keen to understand more about other aspects of the company, you can research its fundamentals here.

View our latest analysis for International Flavors & Fragrances

How will International Flavors & Fragrances perform in the near future?

The view from 14 analysts over the next three years is one of positive sentiment. Generally, broker analysts tend to make predictions for up to three years given the lack of visibility beyond this point. To understand the overall trajectory of IFF's earnings growth over these next fews years, I've fitted a line through these analyst earnings forecast to determine an annual growth rate from the slope.

NYSE:IFF Past and Future Earnings, September 2nd 2019

This results in an annual growth rate of 18% based on the most recent earnings level of US$333m to the final forecast of US$763m by 2022. EPS reaches $7.04 in the final year of forecast compared to the current $3.81 EPS today. With a current profit margin of 8.4%, this movement will result in a margin of 15% by 2022.

Next Steps:

Future outlook is only one aspect when you're building an investment case for a stock. For International Flavors & Fragrances, I've put together three pertinent factors you should look at:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is International Flavors & Fragrances worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether International Flavors & Fragrances is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of International Flavors & Fragrances? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.