Let's talk about the popular International Flavors & Fragrances Inc. (NYSE:IFF). The company's shares saw significant share price movement during recent months on the NYSE, rising to highs of US$106 and falling to the lows of US$94.21. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether International Flavors & Fragrances' current trading price of US$99.43 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.
What Is International Flavors & Fragrances Worth?
According to our valuation model, International Flavors & Fragrances seems to be fairly priced at around 4.7% below our intrinsic value, which means if you buy International Flavors & Fragrances today, you'd be paying a fair price for it. And if you believe that the stock is really worth $104.28, then there isn't much room for the share price grow beyond what it's currently trading. Is there another opportunity to buy low in the future? Since International Flavors & Fragrances's share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. 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?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. Though in the case of International Flavors & Fragrances, it is expected to deliver a relatively unexciting top-line growth of 4.5% in the next few years, which doesn't help build up its investment thesis. Growth doesn't appear to be a main reason for a buy decision for the company, at least in the near term.
What This Means For You
Are you a shareholder? IFF's future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven't considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?
Are you a potential investor? If you've been keeping tabs on IFF, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook means it's worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. While conducting our analysis, we found that International Flavors & Fragrances has 1 warning sign and it would be unwise to ignore it.
If you are no longer interested in International Flavors & Fragrances, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
