International Flavors & Fragrances Touches a New 52-Week High - Analyst Blog

Shares of International Flavors & Fragrances Inc. IFF scaled a new 52-week high of $101.73 during its trading session on Jun 9. The new 52-week high improved upon the last one of $100.93 hit on May 8.

International Flavors & Fragrances closed the session at $101.73, reflecting a solid year-to-date return of 27.3%. The trading volume for the session was 3.2 million shares. Positive revision in the 2014 earnings estimate as well as an expected earnings growth rate of 8.7% for the next five years indicates further upward potential for this flavors and fragrances manufacturer.

Growth Drivers

Share price of International Flavors & Fragrances has climbed 3.7% since the company reported first-quarter 2014 results on May 6. Adjusted earnings grew 11% year over year to $1.32 per share, surpassing the Zacks Consensus Estimate of $1.25 by 5.6%.

Revenues increased 6% or 7% on a constant currency basis. The top-line growth was driven by solid performance in the emerging markets. The acquisition of Aromor added 1% to sales growth. Margins benefited from cost reduction and manufacturing efficiencies.

For 2014, management anticipates revenues and earnings per share to grow in the double-digit range. Aromor is expected to add 1% to local currency sales growth and be accretive to earnings.

The stellar quarter performance and a robust outlook coupled with a positive average earnings surprise of 1.7% have made us optimistic about International Flavors & Fragrances' performance in the coming quarters. The company has an Earnings ESP of +0.79% for 2014 and +1.64% for 2015.
 
Estimate Revisions Show Potency

Over the last 60 days, the Zacks Consensus Estimate for International Flavors & Fragrances has increased by 1.6% to $4.96 for 2014 and by 1.3% to $5.50 for 2015. The Zacks Consensus Estimate also depicts year-over-year growth rates of 13.1% for 2014 and 9.1% for 2015.

International Flavors & Fragrances has a market capitalization of $5.2 billion and carries a Zacks Rank #2 (Buy). Other stocks worth considering in the industry include NL Industries Inc. NL, Sensient Technologies Corporation SXT and Novozymes A/S (NVZMY). All these stocks carry the same Zacks Rank as International Flavors & Fragrances.