26. International Flavors & Fragrances Inc. (NYSE:IFF)
Share Price Upside: 2%
Number of Hedge Fund Investors In Q2 2024:46
Average Analyst Share Price Target: $102.51
International Flavors & Fragrances Inc. (NYSE:IFF) is a specialty raw materials provider that sells chemicals and fragrances used in perfumes, materials used by the pharmaceutical industry, ingredients used in food and beverages, and other items. This lends its business a degree of diversification and cyclical and non cyclical exposure that few companies enjoy. For instance, it allows International Flavors & Fragrances Inc. (NYSE:IFF) to generate stable pharma revenue when the economy is slow, and when it picks up, then its scents division kicks into high gear due to higher discretionary spending by consumers. International Flavors & Fragrances Inc. (NYSE:IFF)’s scale, as evidenced by its 21,500 employees also gives it global exposure which further hedges the business against territory specific macroeconomic headwinds even as it divests its pharma division. Volumes and pricing power are key tenets of International Flavors & Fragrances Inc. (NYSE:IFF)’s hypothesis, and Oppenheimer believes that it has managed economic turbulence well since the firm “is emerging from the industry downturn as a healthier business as it continues to execute on its strategy, productivity initiatives, and balance sheet optimization.”
International Flavors & Fragrances Inc. (NYSE:IFF)’s management shared key details for the lessons that it has learned over the past years during its Q2 2024 earnings call:
“As I did last quarter, I would like to give a brief update on our progress as we work across the organization to refresh our strategy and focus on a business-led operating model. IFF has had a challenging last three years. Constraints on our balance sheet led the Company to underinvest in our core businesses and focused on divestitures. The Company was not structured to effectively navigate the complex and fast moving environment, and we underperformed relative to our peers. We have now had several quarters of growth as we have taken decisive actions to get our businesses back on-track. Our strategy moving forward will be driven by four key pillars: our people, our customer focus, our position as an innovation powerhouse and our operational excellence.
We will engage and empower our people to deliver customer success while we drive profitable market share growth over time. We will also continue to develop sustainable new products and applications that are aligned with our customers’ needs now and in the future, all while being relentless in our commitment to safety, quality and the efficiency in our operations. We have already taken several steps toward resetting and refocusing our operating model, including the announced divestiture of Pharma Solutions, which is still on-track to close in the first half of 2025, and our pivot to an end-to-end business-led operating model that will promote greater accountability and better performance. We are also working hard to improve employee engagement and are seeing positive results.”
