International Flavors & Fragrances ( NYSE: IFF ) stock tanked 19.4% to a three-month low on Thursday as the company's guidance fell short of expectations , owing to macroeconomic uncertainty and limited volume growth.
The stock was the top loser on the S&P 500 index.
International Flavors ( IFF ) expects FY23 sales of ~$12.5B, missing consensus estimate of $12.65B. The outlook excludes ~$350M in sales and ~$50M in adj. operating EBITDA for the Savory Solutions divestiture, which is expected to close in Q2.
The firm expects 2023 comparable currency neutral sales growth of ~6% vs. 9% growth in 2022. Adj. operating EBITDA is projected to be ~$2.34B vs. $2.5B in 2022, as the company focuses on cash flow generation by improving inventory levels.
Foreign exchange will likely have zero impact to sales growth and ~1% adverse impact to adj. operating EBITDA growth in 2023. International Flavors ( IFF ) plans to fully cover dollar cost via pricing actions.
Morgan Stanley said the disappointing outlook was driven by "significant inventory unwind, select production curtailments and negative gearing".
SA contributor WYCO Researcher turned neutral on the stock as the outlook was disappointing, but "not completely unexpected" .
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IFF stock tanks on grim outlook amid macro uncertainty