Results: International Flavors & Fragrances Inc. Delivered A Surprise Loss And Now Analysts Have New Forecasts
International Flavors & Fragrances Inc. (NYSE:IFF) shareholders are probably feeling a little disappointed, since its shares fell 5.7% to US$75.88 in the week after its latest yearly results. Revenues came in at US$11b, in line with estimates, while International Flavors & Fragrances reported a statutory loss of US$10.05 per share, well short of prior analyst forecasts for a profit. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on International Flavors & Fragrances after the latest results.
View our latest analysis for International Flavors & Fragrances
Taking into account the latest results, the 21 analysts covering International Flavors & Fragrances provided consensus estimates of US$11.0b revenue in 2024, which would reflect a measurable 3.9% decline over the past 12 months. International Flavors & Fragrances is also expected to turn profitable, with statutory earnings of US$1.44 per share. In the lead-up to this report, the analysts had been modelling revenues of US$11.0b and earnings per share (EPS) of US$1.55 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.
The consensus price target held steady at US$84.06, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values International Flavors & Fragrances at US$130 per share, while the most bearish prices it at US$66.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 3.9% by the end of 2024. This indicates a significant reduction from annual growth of 25% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 4.4% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - International Flavors & Fragrances is expected to lag the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for International Flavors & Fragrances. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple International Flavors & Fragrances analysts - going out to 2026, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 2 warning signs for International Flavors & Fragrances you should be aware of, and 1 of them is a bit concerning.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
