Long-established in the Chemicals industry, International Flavors & Fragrances Inc (IFF, Financial) has built a stellar reputation over the years. Recently, the company experienced a daily gain of 3.83%, alongside a three-month change of 12.16%. Despite these gains, the latest insights from the GF Score indicate potential challenges ahead. Key metrics such as financial strength, growth, and valuation have shown declines, suggesting that International Flavors & Fragrances Inc may not maintain its historical performance levels. This article delves into these critical metrics to uncover the evolving narrative of the company.
What Is the GF Score?
The GF Score is a comprehensive ranking system developed by GuruFocus, assessing stocks across five key aspects of valuation. This system, which has been backtested from 2006 to 2021, correlates closely with long-term stock performance. Stocks with higher GF Scores typically yield higher returns. The GF Score ranges from 0 to 100, with 100 representing the highest potential for return. Here's how International Flavors & Fragrances Inc ranks:
- Financial strength rank: 4/10
- Profitability rank: 6/10
- Growth rank: 2/10
- GF Value rank: 9/10
- Momentum rank: 5/10
Based on these metrics, GuruFocus assigned International Flavors & Fragrances Inc a GF Score of 69 out of 100, indicating a challenging outlook for future performance.
Understanding International Flavors & Fragrances Inc's Business
International Flavors & Fragrances Inc, with a market cap of $23.5 billion and sales of $11.48 billion, is the largest specialty ingredients producer globally. The company operates primarily in the food, beverage, health, household goods, personal care, and pharmaceutical industries. Its 'nourish' segment, responsible for about half of its revenue, is a top flavor producer and also offers texturants and plant-based proteins. The 'health and biosciences' business, making up about a quarter of revenue, leads globally in probiotics and enzymes. Additionally, IFF stands as one of the top fragrance producers worldwide.
Financial Strength Breakdown
International Flavors & Fragrances Inc's financial strength raises concerns, particularly when examining its balance sheet health. The company's interest coverage ratio of 1.52 is lower than 91.01% of its peers in the Chemicals industry, indicating potential difficulties in managing interest expenses on its debt. Furthermore, its Altman Z-Score of 0.96 falls below the distress threshold, suggesting possible financial distress in the near future. The company's cash-to-debt ratio of 0.07 also highlights challenges in managing existing debt levels.
Growth Prospects
The growth outlook for International Flavors & Fragrances Inc appears limited, as reflected by its low Growth rank. Additionally, the company's predictability rank of one star out of five adds to the uncertainty surrounding its revenue and earnings consistency.
Conclusion
Considering International Flavors & Fragrances Inc's financial strength, profitability, and growth metrics, the GF Score highlights the firm's challenging position for potential underperformance. Investors seeking more robust investment opportunities may explore other companies with stronger GF Scores using the GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
