On Monday, Jefferies made an adjustment to the price target for International Flavors & Fragrances (NYSE:IFF), increasing it slightly to $111 from the previous target of $110. The firm upheld its Buy rating on the stock. This adjustment reflects Jefferies' expectation of positive near-term trends for the company, driven by customer initiatives aimed at boosting volumes and counteracting price elasticity.
According to Jefferies, International Flavors & Fragrances is undertaking strategic measures to enhance its performance. These include increasing accountability, implementing value-based pricing, making customer-focused investments, and optimizing back-office operations. The firm anticipates that these initiatives will lead to an expansion of the company's multiple, acknowledging improvements in execution, consistency, and competitive positioning.
Jefferies forecasts that, based on a 16x-18x multiple of the estimated 2030 EBITDA, which is projected to be around $2.9 billion, International Flavors & Fragrances could see its share price reach between $165 and $188 in five years. This indicates a substantial increase from the newly set price target of $111.
Moreover, Jefferies suggests that International Flavors & Fragrances has over $25 per share of potential balance sheet flexibility. This assessment points to additional financial capacity that could be leveraged by the company to support its growth or shareholder return strategies.
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