INTERNATIONAL FLAVORS & FRAGRANCES INC (IFF) Stock Analysis
INTERNATIONAL FLAVORS & FRAGRANCES INC (IFF) Stock Analysis
Overall Grade: F (Concerning)
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INTERNATIONAL FLAVORS & FRAGRANCES INC faces challenges in financial performance that warrant careful analysis.
Key Metrics:
| Metric | Value | Context |
|---|---|---|
| ROIC | -1.5% | Below expectations |
| FCF Margin | 2.4% | Cash flow pressure |
| Debt/Equity | 0.4x | Conservative leverage |
Investment Thesis: Financial metrics indicate concerning business quality with areas requiring attention.
What is INTERNATIONAL FLAVORS & FRAGRANCES INC's Profitability and ROIC?
INTERNATIONAL FLAVORS & FRAGRANCES INC's return on invested capital of -1.5% is below the typical cost of capital. Gross margin of 36.2% with operating margin at -3.5% reflects the company's moderate market position.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| Return on Invested Capital (ROIC) | -1.5% | Red flag | Below cost of capital |
| Return on Equity (ROE) | -2.4% | Red flag | Moderate equity returns |
| Gross Margin | 36.2% | Good | Competitive pricing environment |
| Operating Margin | -3.5% | Warning | Moderate operational efficiency |
How Strong is INTERNATIONAL FLAVORS & FRAGRANCES INC's Cash Flow Quality?
INTERNATIONAL FLAVORS & FRAGRANCES INC generated $256.0M in free cash flow over the trailing twelve months, representing a 2.4% margin. FCF was positive in N/A of the last 8 quarters, indicating variable cash generation.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| Free Cash Flow Margin | 2.4% | Warning | Thin cash margins |
| Free Cash Flow (TTM) | $256.0M | Good | Positive cash generation |
| OCF/Net Income | -2.6x | Warning | Potential accrual concerns |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
What is INTERNATIONAL FLAVORS & FRAGRANCES INC's Financial Health?
INTERNATIONAL FLAVORS & FRAGRANCES INC's debt-to-equity ratio of 0.4x indicates conservative leverage.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| Debt to Equity | 0.4x | Good | Conservative capital structure |
| Net Cash Position | $-5.4B | Warning | Net debt position |
Is INTERNATIONAL FLAVORS & FRAGRANCES INC Stock Overvalued or Undervalued?
INTERNATIONAL FLAVORS & FRAGRANCES INC trades at a P/E of -51.4x, representing a premium to the sector median of N/A. Free cash flow yield of 1.5% reflects market expectations for growth.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| P/E Ratio | -51.4x | Red flag | Reasonable valuation |
| EV/Sales | 2.2x | Good | Attractive revenue multiple |
| FCF Yield | 1.5% | Warning | Lower cash yield |
| Dividend Yield | 2.4% | Adequate | Growth focus over income |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | -1.5% | Bottom 50% | -0.2x below |
| Free Cash Flow Margin | 2.4% | Top 50% | 2.8x above |
| Gross Margin | 36.2% | Top 50% | 1.4x above |
| Operating Margin | -3.5% | Top 25% | -0.4x below |
| Return on Equity (ROE) | -2.4% | Bottom 50% | -0.3x below |
Rating Thresholds
Return on Invested Capital (ROIC)
Measures how efficiently a company uses its debt and equity capital to generate profits. ROIC above 15% typically indicates a competitive moat.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 20% | Exceptional capital efficiency, strong competitive moat |
| Good | 12% - 20% | Above-average returns, sustainable competitive position |
| Adequate | 8% - 12% | Around cost of capital, moderate competitive position |
| Warning | 4% - 8% | Below cost of capital, value may be eroding |
| Red flag | < 4% | Significant capital destruction, fundamental issues |
Current: -1.5% (Red flag - Bottom 50% of sector (median: 6.8%))
Free Cash Flow Margin
The percentage of revenue converted to free cash flow. Higher margins indicate stronger cash generation and business quality.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 20% | Strong cash generation, high-quality business |
| Good | 10% - 20% | Healthy cash conversion |
| Adequate | 5% - 10% | Moderate cash generation |
| Warning | 0% - 5% | Thin cash margins, capital intensive |
| Red flag | < 0% | Cash burn, potential liquidity concerns |
Current: 2.4% (Warning - Top 50% of sector (median: 0.8%))
Gross Margin
Revenue minus cost of goods sold as a percentage. Higher gross margins indicate pricing power and competitive advantage.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 50% | Strong pricing power and competitive moat |
| Good | 30% - 50% | Healthy margins, differentiated product |
| Adequate | 20% - 30% | Moderate margins, competitive industry |
| Warning | 10% - 20% | Thin margins, commodity-like business |
| Red flag | < 10% | Very thin margins, structural challenges |
Current: 36.2% (Good - Top 50% of sector (median: 25.8%))
Debt to Equity Ratio
Total debt divided by shareholders' equity. Lower ratios indicate more conservative financing and reduced financial risk.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | < 0.3x | Conservative leverage, strong balance sheet |
| Good | 0.3x - 0.7x | Moderate leverage, healthy financial position |
| Adequate | 0.7x - 1.5x | Elevated leverage, monitor closely |
| Warning | 1.5x - 3.0x | High leverage, increased financial risk |
| Red flag | > 3.0x | Excessive leverage, potential distress risk |
Current: 42.3% (Good)
Free Cash Flow Yield
Free cash flow per share divided by stock price. Higher FCF yield indicates better cash return relative to valuation.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 8% | High cash return, potential value opportunity |
| Good | 5% - 8% | Solid cash yield |
| Adequate | 3% - 5% | Moderate cash return |
| Warning | 1% - 3% | Low cash yield, growth expectations |
| Red flag | < 1% | Minimal cash return to shareholders |
Current: 1.5% (Warning)
Frequently Asked Questions
Q: What is INTERNATIONAL FLAVORS & FRAGRANCES INC's Return on Invested Capital (ROIC)?
INTERNATIONAL FLAVORS & FRAGRANCES INC (IFF) has a trailing twelve-month Return on Invested Capital (ROIC) of -1.5%. This compares below the sector median of 6.8%. An ROIC below 8% suggests the company may be destroying shareholder value.
Q: What is INTERNATIONAL FLAVORS & FRAGRANCES INC's Free Cash Flow Margin?
INTERNATIONAL FLAVORS & FRAGRANCES INC (IFF) has a free cash flow margin of 2.4%, generating $256.0 million in free cash flow over the trailing twelve months. A thin FCF margin may indicate heavy reinvestment or operational challenges.
Q: Is INTERNATIONAL FLAVORS & FRAGRANCES INC stock overvalued or undervalued?
INTERNATIONAL FLAVORS & FRAGRANCES INC (IFF) trades at a P/E ratio of -51.4x, which is above the sector median of N/A. The EV/Sales multiple is 2.2x. Free cash flow yield is 1.5%, reflecting growth expectations priced into the stock.
Q: Does INTERNATIONAL FLAVORS & FRAGRANCES INC pay a dividend?
INTERNATIONAL FLAVORS & FRAGRANCES INC (IFF) currently pays a dividend yield of 2.4%. Including share buybacks, the total shareholder yield is 2.4%. This yield is moderate, suggesting a balance between income and growth reinvestment.
Q: What is INTERNATIONAL FLAVORS & FRAGRANCES INC's revenue and earnings growth?
INTERNATIONAL FLAVORS & FRAGRANCES INC (IFF) declined revenue by 5.2% year-over-year. Revenue decline may indicate market challenges or industry headwinds.
Q: How does INTERNATIONAL FLAVORS & FRAGRANCES INC compare to competitors in Materials?
Compared to other companies in Materials, INTERNATIONAL FLAVORS & FRAGRANCES INC (IFF) shows: ROIC of -1.5% is below the sector median of 6.8% (Bottom 29%). FCF margin of 2.4% exceeds the sector median of 0.8% (Top 46% of sector). Gross margin at 36.2% is 10.3 percentage points higher than sector peers. These rankings are based on MetricDuck's analysis of all Materials companies with available SEC filings.
Q: What warning signs should I watch for with INTERNATIONAL FLAVORS & FRAGRANCES INC?
Investors in INTERNATIONAL FLAVORS & FRAGRANCES INC (IFF) should monitor these potential warning signs: 1) FCF margin is thin at 2.4%, leaving limited buffer for economic downturns. Regular monitoring of SEC filings and quarterly trends is recommended.
Data Source: Data sourced from 10-Q filed 2025-11-04. TTM metrics as of Q4 2025.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
This analysis is for informational purposes only and does not constitute investment advice.