Wolfe Research raised its rating on International Flavors & Fragrances, saying a potential sale of its food ingredients business could limit further downside.
The brokerage said IFF’s shares have already absorbed concerns about slowing growth and market share losses in areas such as health and scent, as well as long-running questions over its food ingredients unit, which makes texturants, sweeteners and proteins.
“Investors are now acutely aware” of these risks, Wolfe wrote, adding that management’s candid acknowledgment of the headwinds and plans to divest food ingredients in 2026 have shifted sentiment.
Wolfe still expects hurdles in selling the unit at a strong price but noted “potential buyers may disagree with our cautious secular views,” pointing to interest from both strategic players and private equity. A divestiture could help reduce debt, simplify the portfolio and improve pricing power, it said.
The analysts also credited CEO Frank Clyburn with steps to stabilize the company, including cutting the dividend to address leverage, investing in research and development, and reshaping business segments with an eye toward divestitures.
While Wolfe said it remains cautious on fundamentals, it argued that with shares already down sharply this year and trading at a discount to peers, much of the bad news is priced in.
“We simply don’t want to press our bear thesis,” the analysts wrote, saying they will monitor execution and progress on asset sales in coming quarters.
Source :
https://www.investing.com/news/stock-market-news/international-flavors--fragrances-upgraded-on-potential-food-ingredients-sale-4229583
