Last Update 04 Feb 26

Fair value Increased 1.08%

IFF: 2026 Demand Recovery And Automation Investments Will Support Rebound

The analyst price target for International Flavors & Fragrances edges higher to about US$82.37 from roughly US$81.49 as analysts weigh slightly lower modeled revenue growth against a higher profit margin profile, a modestly reduced discount rate, and a lower assumed future P/E, in line with a recent series of Street target increases.

Analyst Commentary

Recent Street research on International Flavors & Fragrances shows a cluster of price target revisions, with several bullish analysts lifting their targets and a smaller group trimming assumptions. Together, these updates focus on how execution, valuation, and medium term growth expectations might line up.

Bullish Takeaways

Bullish analysts increasing targets into the US$80s often point to a more constructive long term earnings profile. In their view, this supports using higher price targets even when they keep a neutral stance on the stock.
One bullish analyst highlights that, for chemicals and related names, there are potential catalysts such as PMI readings turning positive, interest rate cuts, and possible capacity rationalization in China. These factors could help sentiment toward IFF over time.
Another bullish analyst argues that by FY26 IFF could offer a multiple of U.S. Consumer Staples growth while trading at a material discount to key peers. They see this as leaving room for the valuation gap to narrow.
The clustering of recent target lifts in a relatively short period signals that several firms are recalibrating their models in favor of a higher fair value range, even if they differ on how strong the upside might be.

Bearish Takeaways

More cautious analysts keep neutral ratings even when they raise targets. This suggests that they see the shares as closer to fair value after the recent move in expectations, rather than clearly mispriced.
Some commentary on the broader chemicals space mentions growing oversupply in commodities and an inconsistent backdrop in specialties, which can limit conviction around a strong volume or pricing setup for IFF.
Analysts flag that potential macro and industry catalysts are still early and may be too uncertain to rely on for near term earnings execution. This can justify using more conservative P/E or growth assumptions.
The decision by at least one firm to trim its target while still citing attractive relative growth underscores that not all analysts are prepared to fully credit the medium term growth story in their valuation frameworks yet.

What's in the News

IFF installs the Colibri robot at its Chin Bee production facility in Singapore, an automated dosing system that produces fragrance sample batches on demand in minutes and handles multiple ingredients simultaneously, with capacity for 200 sample batches in eight hours compared with the prior 24 hour requirement (Key Developments).
The Chin Bee site, which serves local, regional and global customers in Greater Asia, uses the new system to shorten the path from ideation to formulation, aiming for faster sample delivery, more capacity and shorter lead times for fragrance creation (Key Developments).
Colibri is now deployed across multiple IFF locations, including Neuilly, France, and Hilversum, Netherlands, as the company continues to build out automation and robotics capabilities following the opening of its US$30 million Singapore Innovation Center (Key Developments).
IFF installs a nature based hydrogen production facility at its Benicarlo, Spain Scent R&D and fragrance ingredients plant, partnering with Iberdrola to use renewable electricity for hydrogenation reactions that support more than 50 key ingredients such as Cashmeran and Kharismal (Key Developments).
The Benicarlo green hydrogen system is designed to produce 100 tons of clean hydrogen annually, with the company highlighting potential carbon dioxide emission reductions of 2,000 tons per year and stating goals to cut direct emissions by 50 percent and indirect emissions by 30 percent by 2030 and to reach net zero operations by 2040, under a 10 year renewable hydrogen agreement with Iberdrola (Key Developments).

Valuation Changes

Fair Value: Price target estimate edges up slightly to about US$82.37 from roughly US$81.49.
Discount Rate: Assumed discount rate is trimmed slightly to about 8.11% from around 8.14%.
Revenue Growth: Modeled revenue growth rate is reduced to roughly 61.98% from about 74.28%.
Net Profit Margin: Assumed profit margin is raised to about 7.38% from roughly 6.69%.
Future P/E: Forward P/E assumption is brought down to about 32.14x from roughly 34.99x.

Strategic divestitures and R&D investments are sharpening focus on higher-margin, innovative products, expected to boost future growth and earnings quality.
Expansion in emerging markets and rising demand for health-conscious products position the company for sustained revenue growth and premium pricing.
Softness in key markets, product commoditization, and reliance on innovation threaten profitability, while capital intensity and local competition could limit growth and margin expansion.

Catalysts

About International Flavors & Fragrances

Manufactures and markets food, beverage, health and biosciences, scent, pharma solutions, and complementary adjacent products in the United States, Europe, and internationally.What are the underlying business or industry changes driving this perspective?

Recent divestitures of commodity businesses (e.g., Pharma Solutions, Soy Crush, Concentrates, Lecithin) and the ongoing strategic evaluation of the Food Ingredients segment are increasing IFF's focus on differentiated, higher-margin, innovation-driven products-supporting future margin expansion and higher earnings quality.
Ongoing investments in R&D and capacity (especially in Health & Biosciences, Taste, and Specialty Fragrance Ingredients) are strengthening the company's innovation pipeline; management expects these initiatives to accelerate revenue and profit growth beginning in 2026 and reaching full impact by 2027.
IFF is positioned to benefit from rising consumer demand for clean-label, health-focused, and better-for-you products-trends that are accelerating globally with regulatory support (such as sugar/salt/fat reduction labeling in both developed and emerging markets), which is expected to drive higher volume growth and support premium pricing.
Proactive expansion and renewed focus in high-growth emerging markets-most notably Latin America, EMEA, and Asia-are expected to capture increased consumption as urbanization, middle class growth, and shifting dietary patterns fuel demand for value-added food and personal care ingredients, acting as a tailwind for long-term revenue growth.
The company's significant deleveraging and strengthened balance sheet (now at 2.5x net debt/EBITDA after divestitures) have restored financial flexibility, enabling increased reinvestment in core businesses and disciplined capital returns (dividends, share buybacks), supporting a sustainable long-term EPS growth profile.

International Flavors & Fragrances Earnings and Revenue Growth

International Flavors & Fragrances Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming International Flavors & Fragrances's revenue will decrease by 0.3% annually over the next 3 years.
Analysts assume that profit margins will increase from -3.5% today to 6.9% in 3 years time.
Analysts expect earnings to reach $784.4 million (and earnings per share of $3.23) by about September 2028, up from $-393.0 million today. However, there is some disagreement amongst the analysts with the more bullish ones expecting earnings as high as $864 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 35.1x on those 2028 earnings, up from -42.4x today. This future PE is greater than the current PE for the US Chemicals industry at 25.9x.
Analysts expect the number of shares outstanding to grow by 0.24% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.11%, as per the Simply Wall St company report.

International Flavors & Fragrances Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Ongoing softness in key markets such as North America and China, along with specifically weak performance in the Health segment of Health & Biosciences, may cause negative growth and drag revenue and net margins in the near to medium term.
The Fragrance Ingredients business is experiencing sustained downturns due to low-cost competition and commoditization, with continued volume and pricing pressures expected to persist until at least 2026, which could erode overall profitability and compress margins.
The company's reliance on successful innovation and R&D pipeline improvements-especially in probiotics and specialty ingredients-creates a risk if these new products do not reach commercialization or fail to offset declining legacy businesses, potentially slowing long-term revenue growth and adversely affecting earnings.
Food Ingredients, despite margin improvement efforts, remains more capital intensive with potential stranded costs and operational complexity arising from ongoing divestitures or a future sale; failure to fully resolve these issues could constrain free cash flow and reduce net income.
Increasing challenges from rapidly innovating local competitors and slower growth in developed markets may limit IFF's ability to consistently outperform the market, reducing pricing power and pressuring both top-line growth and future margin expansion.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $84.518 for International Flavors & Fragrances based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $105.0, and the most bearish reporting a price target of just $68.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $11.4 billion, earnings will come to $784.4 million, and it would be trading on a PE ratio of 35.1x, assuming you use a discount rate of 8.1%.
Given the current share price of $65.07, the analyst price target of $84.52 is 23.0% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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