2023-08-08 14:27:10 ET
International Flavors & Fragrances ( NYSE: IFF ) -19.5% in Tuesday's trading to its lowest in more than a decade after missing Q2 expectations and cutting its full-year sales guidance , prompting a downgrade from Stifel.
IFF ( IFF ) reported reported disappointing Q2 results and reduced its FY 2023 sales and adjusted EBITDA guidance by 7% and 18%, respectively, at the midpoint, with the miss and lowered guidance largely reflecting ongoing customer destocking, impacting volumes and resulting in more significant manufacturing absorption costs.
Q2 volumes declined by low double-digits, worsening sequentially, with the Functional Ingredients remaining especially challenged, accounting for 60% of the total decline, with the remaining 75% of the business declining by mid-single-digits.
Noting IFF ( IFF ) has reduced FY 2023 guidance three times since its December 2022 investor meeting, Stifel cut the stock to Hold From Buy with an $85 price target, sliced from $123, mostly reflecting the lack of visibility into improving volume trends, the company's competitive position relative to peers, and lack of management credibility.
Stifel said IFF ( IFF ) continues to have weaker volumes than flavor and fragrance peers "largely reflecting its business mix related to Functional Ingredients and efforts to further improve/reduce inventories are expected to weigh on adjusted EBITDA."
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International Flavors plummets to lowest in a decade after guidance cut