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International Flavors & Fragrances (IFF)
NYSE:IFF
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International Flavors & Fragrances
(NYSE:IFF)
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Rating:57Neutral
Price Target:
$86.00
▲(5.66% Upside)
Action:ReiteratedDate:02/17/26
The score is driven primarily by uneven financial performance (recent loss despite resilient cash flow and lower debt). Earnings-call commentary is moderately constructive with modest 2026 growth and execution plans, while valuation is constrained by loss-making results. Technicals are supportive but appear overbought, adding near-term risk.
Positive Factors
Balance-sheet deleveraging
Material debt reduction and lower net leverage give the company durable financial flexibility. A 2.6x net-debt/EBITDA position and ~$590M cash supports disciplined capital allocation, buybacks/deleveraging plans, and cushions versus cyclical revenue swings over the next 2–6 months.
Consistent operating cash flow
Steady operating cash generation, even amid a 2025 net loss, underpins the firm's ability to fund CapEx (~6% of sales), R&D and selective reinvestment without sole reliance on external financing. This persistent cash conversion supports medium-term execution of productivity and portfolio actions.
R&D, higher‑value mix & segment breadth
Sustained R&D and capacity investment plus growing wins in Taste, Health & Biosciences and Scent increase exposure to higher-margin, innovation-driven products. This diversified, value-added mix and capability build creates structural margin upside and resilience versus commodity-exposed lines.
Negative Factors
Profitability volatility
Recurrent swings between modest profits and losses undermine durable earnings power. Volatile margins reduce retained earnings and make long-term planning harder, increasing the risk that operational or market setbacks will force larger strategic trade-offs or slower reinvestment over the next several quarters.
Free cash flow & working capital strain
A meaningful FCF shortfall and inventory/receivables build tie up liquidity and constrain the company’s ability to self-fund M&A, buybacks or accelerated debt paydown. Until working-capital normalization or divestiture proceeds materialize, capital flexibility remains partially impaired.
Commodity & Food Ingredients exposure
Ongoing commodity-price sensitivity and pockets of Food Ingredients weakness create structural cyclicality. The business faces execution and pricing pressure while migrating to specialties; that transition is multi-quarter and exposes near-term margin and revenue durability risks if demand or prices diverge.
International Flavors & Fragrances (IFF) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$21.25B
Dividend Yield2.41%
Average Volume (3M)1.75M
Price to Earnings (P/E)―
Beta (1Y)0.56
Revenue Growth-3.01%
EPS Growth82.30%
CountryUS
Employees22,400
SectorBasic Materials
Sector Strength58
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)0.80
Shares Outstanding256,096,370
10 Day Avg. Volume2,062,079
30 Day Avg. Volume1,750,220
Financial Highlights & Ratios
PEG Ratio0.18
Price to Book (P/B)1.22
Price to Sales (P/S)1.58
P/FCF Ratio67.39
Enterprise Value/Market Cap1.25
Enterprise Value/Revenue2.43
Enterprise Value/Gross Profit6.96
Enterprise Value/Ebitda29.31
Forecast
1Y Price Target
$92.46Price Target Upside13.60% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering13
EPS Forecast (FY)4.43
Revenue Forecast (FY)$10.70B
International Flavors & Fragrances Business Overview & Revenue Model
Company DescriptionInternational Flavors & Fragrances Inc., together with its subsidiaries, manufactures and sells cosmetic active and natural health ingredients for use in various consumer products in Europe, Africa, the Middle East, Greater Asia, North America, and Latin America. It operates through Nourish, Scent, Health & Biosciences, and Pharma Solutions segments. The Nourish segment offers natural and plant-based specialty food ingredients, such as flavor compounds, and savory solutions and inclusions. It also provides natural food protection ingredients consist of natural antioxidants and anti-microbials as well as beverages, sweets , and dairy products. The Scent segment provides fragrance compounds, which include fine fragrances comprising perfumes and colognes, as well as consumer fragrances; fragrance ingredients comprising synthetic and natural ingredients that could be combined with other materials to create fragrance and consumer compounds; and cosmetic active ingredients consisting of active and functional ingredients, botanicals, and delivery systems to support its customers' cosmetic and personal care product lines. The Health & Biosciences segment develops and produces enzymes, food cultures, probiotics, and specialty ingredients. The Pharma Solutions segment produces and sells cellulosics and seaweed-based pharma excipients. The company sells its products primarily to manufacturers of perfumes and cosmetics, hair and other personal care products, soaps and detergents, cleaning products, dairy, meat and other processed foods, beverages, snacks and savory foods, sweet and baked goods, dietary supplements, infant and elderly nutrition, functional food, and pharmaceutical excipients and oral care products. International Flavors & Fragrances Inc. was founded in 1833 and is headquartered in New York, New York.
How the Company Makes MoneyIFF generates revenue through the sale of its flavor and fragrance products to manufacturers across various sectors. The company's revenue model is primarily based on a B2B (business-to-business) framework, where it forms long-term partnerships with key clients, including major food and beverage brands, consumer goods companies, and personal care manufacturers. Key revenue streams include the sale of customized flavor compounds, fragrance formulations, and essential oils. Additionally, IFF invests in research and development to innovate and expand its product offerings, which drives growth and allows the company to maintain a competitive edge. Strategic acquisitions and collaborations with other industry players also contribute significantly to its earnings, enabling IFF to enhance its product portfolio and market reach.
International Flavors & Fragrances Key Performance Indicators (KPIs)
Any
Revenue by Segment
Highlights revenue contributions from different business segments, indicating which areas drive growth and profitability, and where strategic shifts might be needed.
Highlights revenue contributions from different business segments, indicating which areas drive growth and profitability, and where strategic shifts might be needed.
Data provided by:
The Fly
The FlyInternational Flavors & Fragrances Earnings Call Summary
Earnings Call Date:Feb 11, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 11, 2026
Earnings Call Sentiment Positive
The call highlights meaningful progress on balance sheet strengthening, disciplined capital allocation, margin expansion and targeted reinvestment in R&D and capacity—supported by solid segment-level wins in Taste, Scent (Fine Fragrance) and pockets of Health & Biosciences. These positives are tempered by continued top-line pressure and profitability volatility in Food Ingredients (notably Q4 weakness), commodity pressure in Fragrance Ingredients, a sizable free cash flow shortfall in 2025 driven by transaction-related charges and working capital builds, and modest near-term 2026 guidance with H1 comparability headwinds. Management has clear remediation plans (portfolio sales, productivity, innovation investments, cash-focused incentives) and expects improvements through 2026 and into 2027.Q4-2025 Updates
Positive Updates
Improved Leverage and Balance Sheet
Net debt to credit-adjusted EBITDA improved to 2.6x (from 3.8x in 2024); gross debt reduced to ~$6.0B (down nearly $3.0B vs 2024); cash & equivalents of $590M.
Consolidated Profitability Expansion
Full-year EBITDA grew ~7% with ~100 basis points of EBITDA margin expansion; Q4 EBITDA was $437M, a ~7% increase, and Q4 EBITDA margin improved ~90 basis points to 16.9%.
Taste Segment Strength
Full-year Taste sales up ~4% (two-year avg growth ~4%); Q4 Taste sales $588M (+2%) with Q4 EBITDA up ~17% to $94M, driven by new wins, favorable net pricing and productivity.
Health & Biosciences Momentum
Full-year Health & Biosciences sales improved (management cited ~3% full-year improvement) with EBITDA up ~7% for the year; Q4 sales $589M (+5%) and Q4 EBITDA increased ~20% to $155M, led by Food Biosciences, Animal Nutrition and Home & Personal Care.
Scent Performance and Higher‑Value Mix
Full-year Scent sales +3% with EBITDA +2%; Q4 Scent sales $610M (+4%): Fine Fragrance +10% and Consumer Fragrance mid-single-digit growth, indicating strength in higher-margin areas.
Food Ingredients Margin Improvement (Full Year)
Although full-year Food Ingredients sales were down, the business delivered ~10% EBITDA growth and ~150 basis points of EBITDA margin expansion for the full year, reflecting margin improvement through portfolio actions and productivity.
Active Portfolio Optimization
Completed divestitures (Pharma Solutions, nitrocellulose, René Laurent), agreement to sell soy crush concentrates & lecithin to Bunge (expected by April), and formally launched a competitive sale process for Food Ingredients with meaningful interest from strategics and financial sponsors.
Investment in Innovation and Capacity
Invested ~ $100M in R&D in 2025; CapEx totaled $594M (~5.5% of sales) in 2025 and planned CapEx ~6% of sales in 2026; launched new technologies (EnviroCAPS biodegradable encapsulation, 'Super Carrot' umami ingredient) and are investing in enzyme capacity, naturals, biotech and AI.
Cash Return & Capital Allocation Discipline
Returned $409M via dividends and $38M in share repurchases (program started in Q4); management intends to use potential Food Ingredients sale proceeds to reduce dilution and pay down debt while keeping net leverage below 3.0x.
Negative Updates
Food Ingredients Revenue Weakness and Q4 Profitability Drop
Q4 Food Ingredients sales $802M, down ~4%; Q4 profitability declined ~11% to $82M driven by volume declines and unfavorable net pricing; full-year sales were down partly due to strategic exits of low-margin business and sanctions-related lost sales in Russia.
Fragrance Ingredients Commodity Pressure
Fragrance Ingredients experienced double-digit declines in commodity sales and price competition; unfavorable net pricing partially offset Scent segment volume and productivity gains, pressuring margins.
Free Cash Flow Shortfall in 2025
Reported free cash flow of $256M for 2025, substantially below earlier commentary (~just under $500M expectation), driven by ~ $300M Reg G/divestiture charges and higher working capital (inventory and receivables/payables timing).
Working Capital and Inventory Build
Working capital outflow of ~ $166M in 2025 with higher inventory levels in strategic areas; management acknowledged inventory was higher than targets earlier in the year and required corrective action.
Modest Near‑Term Top‑Line Guidance and Calendarization Risk
2026 guidance of $10.5B–$10.8B implies only 1%–4% currency-neutral sales growth and EBITDA guidance $2.05B–$2.15B (3%–8% growth); company expects comparisons to be tougher in H1 and more muted EBITDA early in the year (Q1 adjustments noted).
Pricing Headwinds in 2026 Guidance
Management expects pricing to be slightly down in 2026 (primarily driven by the commodity portion of Fragrance Ingredients and residual carryover impacts in Food Ingredients) with modest input-cost inflation to be managed via productivity and selective pricing/reformulation.
Regional/Segment Pockets of Underperformance
Health & Biosciences underperformed in North America in 2025 (management cited leadership changes and remediation actions), and Fragrance Ingredients/commodity exposures remain a drag while the business migrates to higher-value specialties.
Company Guidance
The company guided 2026 sales of $10,500,000,000 to $10,800,000,000 (comparable currency‑neutral growth of 1%–4%) and EBITDA of $2,050,000,000 to $2,150,000,000 (comparable currency‑neutral EBITDA growth of 3%–8%), noting FX should be roughly +1 percentage point to sales and negligible to EBITDA; growth is expected to be volume‑driven (incremental margins on volume ~30%–35%), led by Taste, Health & Biosciences and Scent, with modest EBITDA growth expected in Q1 versus a like‑for‑like Q1 2025 base of about $55,000,000 (adjusting for divestitures) and progressive improvement thereafter. Management expects CapEx of ~6% of sales, productivity to fund selective reinvestment, higher Reg G/one‑time costs as the Food Ingredients sale process progresses, improved operating cash flow generation excluding those items, an operating cash‑flow‑conversion incentive metric (EBITDA − CapEx − change in net working capital), and intends to use potential sale proceeds to buy back shares and pay down debt while keeping net debt/credit‑adjusted EBITDA below a ~3.0x target (net debt/credit‑adjusted EBITDA was 2.6x at year‑end 2025).International Flavors & Fragrances Financial Statement Overview
Summary
Mixed fundamentals: profitability has been volatile with a return to a net loss in 2025 and negative EBITDA margin, but operating cash flow remained positive and debt has trended down materially, supporting financial flexibility despite elevated earnings risk.Income Statement
Profitability has been volatile: after returning to modest profitability in 2024 (about a 2.1% net margin), results weakened again in 2025 with a net loss (about -3.4% net margin) and negative EBITDA margin. Revenue has also softened, with 2025 revenue down versus 2024 and multi-year growth choppy. A positive is that gross margin has held relatively steady in the mid-30% range recently, but the swing between profits and losses points to elevated earnings risk.42
Neutral
Balance Sheet
Leverage looks manageable but meaningful. Total debt has come down over the last few years (from roughly $12.2B in 2021 to about $6.0B in 2025), while equity remains sizable (about $14.2B in 2025), supporting the capital structure. However, the business has recently produced losses (2025 and 2023), which reduces the balance sheet’s ability to self-repair through retained earnings, and prior periods show debt-to-equity near the ~0.6–0.7 range (moderate leverage).58
Neutral
Cash Flow
Cash generation is a relative strength. Operating cash flow has remained positive across all periods shown, including 2025 (~$0.85B) despite a net loss, and free cash flow stayed positive in most years (though it declined in 2025 to ~$0.26B and was negative in 2022). The pattern suggests decent underlying cash conversion, but the step-down in 2025 free cash flow and prior variability indicate less consistency than top-tier cash compounders.63
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 10.89B | 11.48B | 11.48B | 12.44B | 11.66B |
| Gross Profit | 3.37B | 4.12B | 3.68B | 4.15B | 3.73B |
| EBITDA | 1.96B | 1.60B | -996.00M | -110.00M | 1.80B |
| Net Income | -374.00M | 243.00M | -2.56B | -1.87B | 268.00M |
Balance Sheet | |||||
| Total Assets | 25.54B | 28.67B | 30.98B | 35.52B | 39.66B |
| Cash, Cash Equivalents and Short-Term Investments | 590.00M | 469.00M | 703.00M | 483.00M | 711.00M |
| Total Debt | 5.99B | 9.62B | 10.82B | 11.74B | 12.20B |
| Total Liabilities | 11.36B | 14.76B | 16.34B | 17.78B | 18.44B |
| Stockholders Equity | 14.18B | 13.88B | 14.61B | 17.66B | 21.08B |
Cash Flow | |||||
| Free Cash Flow | 256.00M | 602.00M | 936.00M | -109.00M | 1.04B |
| Operating Cash Flow | 850.00M | 1.07B | 1.44B | 397.00M | 1.44B |
| Investing Cash Flow | 2.27B | 326.00M | 574.00M | 745.00M | -18.00M |
| Financing Cash Flow | -3.09B | -1.61B | -1.85B | -1.23B | -1.30B |
International Flavors & Fragrances Technical Analysis
Positive
81.39
Price Trends
70.81
Positive
67.35
Positive
68.97
Positive
Market Momentum
3.37
Negative
71.21
Negative
77.85
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IFF, the sentiment is Positive. The current price of 81.39 is above the 20-day moving average (MA) of 75.84, above the 50-day MA of 70.81, and above the 200-day MA of 68.97, indicating a bullish trend. The MACD of 3.37 indicates Negative momentum. The RSI at 71.21 is Negative, neither overbought nor oversold. The STOCH value of 77.85 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IFF.
International Flavors & Fragrances Risk Analysis
International Flavors & Fragrances disclosed 30 risk factors in its most recent earnings report. International Flavors & Fragrances reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
International Flavors & Fragrances Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $14.98B | 22.52 | 22.72% | 1.96% | 3.09% | 12.25% | |
68 Neutral | $9.16B | 19.57 | 8.07% | 5.33% | -3.33% | -19.59% | |
68 Neutral | $28.78B | 18.48 | 21.34% | 2.71% | -12.98% | -11.34% | |
65 Neutral | $3.89B | 29.02 | 12.31% | 1.70% | 4.25% | 56.51% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
60 Neutral | $20.18B | ― | -5.24% | 1.10% | -23.92% | 90.47% | |
57 Neutral | $21.25B | -59.59 | -2.48% | 2.41% | -3.01% | 82.30% |
* Basic Materials Sector Average
IFF
International Flavors & Fragrances
81.39
3.60
4.63%
ALB
Albemarle
168.42
89.04
112.17%
EMN
Eastman Chemical
79.16
-14.73
-15.69%
PPG
PPG Industries
126.53
15.92
14.39%
RPM
RPM International
115.57
-2.62
-2.21%
SXT
Sensient Technologies
90.47
21.97
32.06%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.