IFF Stock Forecast & Price Target

International Flavors & Fragrances (IFF) demonstrated robust financial performance in 3Q24, achieving net sales of $2,771 million, a 3% year-over-year increase, and surpassing consensus estimates of $2,681 million. The company's volume growth accelerated for the fifth consecutive quarter, with a high single-digit growth trajectory observed across all business segments, particularly within Functional Ingredients. With promising organic sales growth expectations of 1-4% for FY25 and positive trends within the broader consumer staples market, IFF's outlook remains firmly positive, supported by its leadership in the specialty ingredients sector.

International Flavors & Fragrances faces several downside risks, including macroeconomic weakness that may dampen customer demand, increased competitive pressure, rising input costs, and unfavorable foreign exchange impacts, which have resulted in EBITDA shortfalls. The company anticipates debt leverage will decline to approximately 3x by the end of 2025, largely due to the anticipated sale of its Pharma segment and modest improvement in free cash flow, although they are currently at 3.9x leverage as of 3Q24. Delays in achieving sales and earnings per share expectations for 2025-2026 are compounded by the higher-than-expected foreign exchange headwinds, leading to reduced revenue estimates and a lowered price target.