On Tuesday, International Flavors & Fragrances (NYSE:IFF) experienced a change in its stock rating. Morgan Stanley downgraded the company's stock from Overweight to Equalweight, while maintaining a price target of $100.00. The adjustment comes as the stock approaches the firm's set price target and as the consensus on FY24 Adjusted EBITDA aligns closely with Morgan Stanley's forecast.
The analyst noted that the current share price is nearing the previously established price target. Additionally, the consensus forecast for FY24 Adjusted EBITDA, at $2,109 million, is now in line with Morgan Stanley's prediction of $2,119 million. This figure also exceeds the upper end of IFF's own FY24 Adjusted EBITDA guidance, which ranges from $1.9 billion to $2.1 billion, with the company recently indicating expectations toward the higher end of this range.
The downgrade reflects the view that while IFF has fewer significant near-term catalysts, the firm maintains a positive outlook on the ingredients sector. This stance is embodied in the new DSFIR Overweight rating. The analyst suggests that IFF's stock could see further upside and a potential re-rating in the mid-term if the company continues to outperform its peers and capitalizes on its consistent record of meeting or exceeding consensus expectations.
Morgan Stanley also highlighted the possibility of IFF executing on a refinancing opportunity around mid-2025, which could serve as a catalyst for the stock. This scenario is part of the firm's Bull Case for IFF, suggesting a positive outlook for the company's financial performance in the coming years.
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