International Flavors & Fragrances Inc. (NYSE:IFF) led the NYSE gainers with a relatively large price hike in the past couple of weeks. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s examine International Flavors & Fragrances’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
What's the opportunity in International Flavors & Fragrances?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 5.5% below my intrinsic value, which means if you buy International Flavors & Fragrances today, you’d be paying a reasonable price for it. And if you believe the company’s true value is $127.05, then there isn’t much room for the share price grow beyond what it’s currently trading. What's more, International Flavors & Fragrances’s share price may be more stable over time (relative to the market), as indicated by its low beta.
Can we expect growth from International Flavors & Fragrances?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. International Flavors & Fragrances’s earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? IFF’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you’ve been keeping an eye on IFF, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on International Flavors & Fragrances. You can find everything you need to know about International Flavors & Fragrances in the latest infographic research report. If you are no longer interested in International Flavors & Fragrances, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
If you spot an error that warrants correction, please contact the editor at email@example.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.
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