Value
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.9 |
| P/S | 9.0 |
| EV/EBITDA | 3.2 |
| Fwd P/E | 7.2 |
| PEG | 7.6 |
| Analyst target | 4.0 |
- ▸Forward P/E: 17.4x
- ▸PEG: 0.90
IFF · Why this verdict
Why International Flavors & Fragran (IFF) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score4.9/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
A golden-cross formation, bullish MACD, and rising on-balance volume signal improving demand for the shares, but with the stock sitting only approximately 5% below its analyst price target and a reward-to-risk ratio below 1-to-1, the technical setup offers limited margin of error for new positions entered at current levels. Momentum breakdown | Analyst consensus price target is revised above $95, expanding potential upside beyond 20% from current levels and improving the risk/reward to at least 1.5-to-1. | →Stable |
| CounterIn an early-stage momentum recovery, price can re-rate before analyst targets are formally raised, making the current target ceiling less binding than it appears; if the golden cross and rising volume hold, the stock may force upward estimate revisions rather than waiting for them. | ||
Revenue has declined approximately 4% year-over-year, leaving the company in contraction territory rather than on the recovery trajectory needed to close the gap between current earnings and analyst targets; absent top-line growth, margin improvement alone is unlikely to drive a sustained re-rating. Growth breakdown | Revenue growth turns positive and exceeds 3% year-over-year for two consecutive quarters, confirming the contraction has bottomed. | →Stable |
| CounterRevenue declines in specialty chemicals can reflect deliberate portfolio pruning of lower-margin product lines rather than a loss of demand; if mix shifts toward higher-value formulations, a flat or declining top line could coexist with improving operating margins and earnings quality. | ||
Free cash flow is running at approximately 448% of reported net income — an unusually high conversion rate that likely reflects significant non-cash charges suppressing accounting earnings relative to actual cash generated — yet analysts have identified no competitive moat, meaning this cash-generation advantage may not be defensible over a multi-year horizon. Quality breakdown | Free cash flow as a percentage of net income remains above 150% for four consecutive quarters, sustaining the conversion advantage even as revenue trends improve. | →Stable |
| CounterAn FCF-to-net-income ratio at 448% is unlikely to persist; when non-cash charges normalize or acquisition-related amortization winds down, the ratio could compress dramatically, making the current cash-flow screen misleading as a forward indicator. | ||
The company has beaten sell-side consensus in three of the last four quarters with an average positive surprise near 5%; however, this track record is offset by forward estimates trending lower, suggesting that some of the apparent beat frequency reflects a declining consensus bar rather than accelerating business performance. Earnings | Forward earnings estimates stabilize or rise over the next two quarters and the company delivers a positive surprise of more than 5% against the stabilized bar, decoupling the beat streak from estimate cuts. | →Stable |
| CounterFalling estimates after positive surprises is a common pattern in turnaround names where analysts over-correct; if the company continues to beat even at the lower bar, repeated positive surprises against rising expectations could eventually catalyze a meaningful re-rating. | ||
A golden-cross formation, bullish MACD, and rising on-balance volume signal improving demand for the shares, but with the stock sitting only approximately 5% below its analyst price target and a reward-to-risk ratio below 1-to-1, the technical setup offers limited margin of error for new positions entered at current levels.
→StableMomentum breakdown
- Expectation
- Analyst consensus price target is revised above $95, expanding potential upside beyond 20% from current levels and improving the risk/reward to at least 1.5-to-1.
CounterIn an early-stage momentum recovery, price can re-rate before analyst targets are formally raised, making the current target ceiling less binding than it appears; if the golden cross and rising volume hold, the stock may force upward estimate revisions rather than waiting for them.
Revenue has declined approximately 4% year-over-year, leaving the company in contraction territory rather than on the recovery trajectory needed to close the gap between current earnings and analyst targets; absent top-line growth, margin improvement alone is unlikely to drive a sustained re-rating.
→StableGrowth breakdown
- Expectation
- Revenue growth turns positive and exceeds 3% year-over-year for two consecutive quarters, confirming the contraction has bottomed.
CounterRevenue declines in specialty chemicals can reflect deliberate portfolio pruning of lower-margin product lines rather than a loss of demand; if mix shifts toward higher-value formulations, a flat or declining top line could coexist with improving operating margins and earnings quality.
Free cash flow is running at approximately 448% of reported net income — an unusually high conversion rate that likely reflects significant non-cash charges suppressing accounting earnings relative to actual cash generated — yet analysts have identified no competitive moat, meaning this cash-generation advantage may not be defensible over a multi-year horizon.
→StableQuality breakdown
- Expectation
- Free cash flow as a percentage of net income remains above 150% for four consecutive quarters, sustaining the conversion advantage even as revenue trends improve.
CounterAn FCF-to-net-income ratio at 448% is unlikely to persist; when non-cash charges normalize or acquisition-related amortization winds down, the ratio could compress dramatically, making the current cash-flow screen misleading as a forward indicator.
The company has beaten sell-side consensus in three of the last four quarters with an average positive surprise near 5%; however, this track record is offset by forward estimates trending lower, suggesting that some of the apparent beat frequency reflects a declining consensus bar rather than accelerating business performance.
→StableEarnings
- Expectation
- Forward earnings estimates stabilize or rise over the next two quarters and the company delivers a positive surprise of more than 5% against the stabilized bar, decoupling the beat streak from estimate cuts.
CounterFalling estimates after positive surprises is a common pattern in turnaround names where analysts over-correct; if the company continues to beat even at the lower bar, repeated positive surprises against rising expectations could eventually catalyze a meaningful re-rating.
TrendMatrix Research · core thesis
Engine thesis — one sentence
The company's technical setup has turned constructive — golden-cross formation, rising volume accumulation, RSI at 57, three beats in the last four quarters — yet revenue has been contracting approximately 4% year-over-year, the business lacks a competitive moat, and the reward-to-risk ratio is below 1-to-1 at current prices, making the setup unattractive for new buyers even as near-term price momentum improves.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.0 |
| ROA | 1.4 |
| Gross margin | 3.3 |
| Op margin | 4.0 |
| Net margin | 3.8 |
| Current ratio | 5.5 |
| FCF quality | 10.0 |
| Moat | 4.6 |
| Piotroski F | 6.7 |
- ▸Excellent cash conversion: 448% FCF/NI
- ▸No competitive moat
Growth
1.6/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 1.6 |
- ▸Declining revenue: -4%
Momentum
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 3.9 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.4 |
| Analyst rating | 7.4 |
| Price target | 6.3 |
Insider
6.5/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 6.5 |
| insider conviction | 8.0 |
| holder change | 5.1 |
- ▸Modest insider buying — $20,317,854 (0.095% of mkt cap)
Peer rank
2.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.7 |
| quality rank | 5.0 |
| growth rank | 1.0 |
Technical
3.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.0 |
| 52w position | 10.0 |
| gap | 5.0 |
Risk (lower is worse)
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.9 |
| days to cover | 3.3 |
| volatility | 5.9 |
| put call | 4.1 |
| implied vol | 5.0 |
| beta | 7.3 |
| debt equity | 8.2 |
Catalyst
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 3.5 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 4.8 |
| dividend safety | 4.8 |
| news activity | 6.0 |
- ▸Strong earnings: 3B/1M
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position. | News modifier +1 (SELL_IF_HOLDING → HOLD_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_F_SELL|L3:NEWS_MOD=+1Passed (7)
- MOMENTUM:7.6>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_BOOST:ANALYST:0.35
- EARNINGS_PROXIMITY:31d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.1=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.14
Upside
-2.0%
Downside
14.3%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 70, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 4.9 below the 5.4 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Momentum at 7.6) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.1=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.14 — supplementary context, not the trigger for this path.
The strongest dimensions are Momentum at 7.6, Sentiment at 6.8, and Insider at 6.5; the weakest are Growth at 1.6, Peer rank at 2.7, and Technical at 3.8. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -0.14 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Revenue Contraction Challenges Recovery
Trip ifRevenue growth turns positive and exceeds 3% year-over-year for 2 consecutive quarters.
- P2Exceptional Cash Conversion No Moat
Trip ifFree cash flow as a percentage of net income falls below 100% for 2 consecutive quarters.
- P3Earnings Beats Amid Falling Estimates
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P4Momentum Breakout Thin Upside
Trip ifAnalyst consensus price target is revised above $95, creating more than 20% upside from current levels.