A week ago, International Flavors & Fragrances Inc. (NYSE:IFF) came out with a strong set of quarterly numbers that could potentially lead to a re-rate of the stock. It was overall a positive result, with revenues beating expectations by 2.2% to hit US$2.9b. International Flavors & Fragrances also reported a statutory profit of US$0.66, which was an impressive 76% above what the analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

Following last week's earnings report, International Flavors & Fragrances' 15 analysts are forecasting 2024 revenues to be US$11.3b, approximately in line with the last 12 months. International Flavors & Fragrances is also expected to turn profitable, with statutory earnings of US$1.79 per share. In the lead-up to this report, the analysts had been modelling revenues of US$11.2b and earnings per share (EPS) of US$1.38 in 2024. Although the revenue estimates have not really changed, we can see there's been a sizeable expansion in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

The consensus price target was unchanged at US$104, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values International Flavors & Fragrances at US$130 per share, while the most bearish prices it at US$77.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await International Flavors & Fragrances shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the International Flavors & Fragrances' past performance and to peers in the same industry. We would highlight that revenue is expected to reverse, with a forecast 0.6% annualised decline to the end of 2024. That is a notable change from historical growth of 20% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 4.8% per year. It's pretty clear that International Flavors & Fragrances' revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards International Flavors & Fragrances following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that International Flavors & Fragrances' revenue is expected to 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.

With that in mind, we wouldn't be too quick to come to a conclusion on International Flavors & Fragrances. Long-term earnings power is much more important than next year's profits. We have forecasts for International Flavors & Fragrances going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for International Flavors & Fragrances that we have uncovered.

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