Shareholders might have noticed that International Flavors & Fragrances Inc. (NYSE:IFF) filed its full-year result this time last week. The early response was not positive, with shares down 5.7% to US$75.88 in the past week. 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. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. 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.
Taking into account the latest results, the current consensus, from the 21 analysts covering International Flavors & Fragrances, is for revenues of US$11.0b in 2024. This implies a noticeable 3.9% reduction in International Flavors & Fragrances' revenue over the past 12 months. International Flavors & Fragrances is also expected to turn profitable, with statutory earnings of US$1.44 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$11.0b and earnings per share (EPS) of US$1.55 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.
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. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic International Flavors & Fragrances analyst has a price target of US$130 per share, while the most pessimistic values 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.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. 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. The consensus price target held steady at US$84.06, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for International Flavors & Fragrances going out to 2026, and you can see them free on our platform here.
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with International Flavors & Fragrances (at least 1 which is a bit concerning) , and understanding these should be part of your investment process.
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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.
