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International Flavors & Fragrances Inc (NYSE:IFF) received a lot of attention from a substantial price movement on the NYSE in the over the last few months, increasing to $156.87 at one point, and dropping to the lows of $137.84. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether International Flavors & Fragrances’s current trading price of $139.32 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at International Flavors & Fragrances’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. See our latest analysis for International Flavors & Fragrances
Is International Flavors & Fragrances still cheap?
The stock is currently trading at US$139.32 on the share market, which means it is overvalued by 33% compared to my intrinsic value of $105.12. This means that the opportunity to buy International Flavors & Fragrances at a good price has disappeared! If you like the stock, you may want to keep an eye out for a potential price decline in the future. Since International Flavors & Fragrances’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
Can we expect growth from International Flavors & Fragrances?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 97.09% over the next couple of years, the future seems bright for International Flavors & Fragrances. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? IFF’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe IFF should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.