KRYAY - For Now The Market Seems Skeptical That International Flavors And Fragrances' Big Deal Will Pay Off

• The Street seems uncommonly skeptical about the long-term merits of IFF's merger with DuPont's Nutrition and Bioscience business, with the shares trading below both near- and long-term fair values.
• Cross-selling synergies may take longer to appear, and may be more dependent upon R&D, but NB does bring exposure to more attractive markets like plant protein and probiotics/cultures.
• Management will have to prove that it can achieve its merger synergy targets, as Street expectations are below management guidance.
• Underlying growth at IFF seems to have weakened going into the NB deal, raising the question of whether the last major deal was not integrated well.
• Low single-digit revenue growth and mid-single-digit FCF growth (mid-teens FCF margins) can drive a share price in the $170s.

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