• If you are wondering whether International Flavors & Fragrances is attractively priced right now, this article walks through what the market is paying for the stock and how that lines up with its fundamentals.
• The share price recently closed at US$71.30, with returns of 1.6% over the last 7 days, 7.1% over 30 days, 4.8% year to date, but a 14.6% decline over 1 year, a 30.7% decline over 3 years and a 26.5% decline over 5 years.
• Those mixed returns have kept International Flavors & Fragrances on many investors' watchlists, as past share price weakness can sometimes reflect changing expectations for the business or its sector. Recent company related news and corporate developments help frame whether the current price reflects temporary pessimism or a more persistent reassessment of the stock.
• Our Simply Wall St valuation model currently gives the company a valuation score of 4 out of 6, which means it screens as undervalued on four of the six checks we apply. Next we will walk through those methods before finishing with a different way to think about value that can be even more useful.

Approach 1: International Flavors & Fragrances Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model takes expected future cash flows and discounts them back to today to estimate what the business might be worth right now. It is essentially asking what those future dollars are worth in today’s terms.

For International Flavors & Fragrances, the model used is a 2 Stage Free Cash Flow to Equity approach, based on cash flow projections. The latest twelve month free cash flow is about $421.4 million. Analyst estimates and extrapolated figures suggest free cash flow of $934.7 million in 2026 and $1,134.0 million in 2028, rising further to a projected $1,525.1 million in 2035. Simply Wall St discounts each of these future cash flows back to today using its own assumptions about risk and required return.

Putting those discounted projections together results in an estimated intrinsic value of US$90.30 per share, compared with the recent share price of US$71.30. On this DCF view, the stock appears to trade at a discount of around 21.0% to that intrinsic value estimate.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests International Flavors & Fragrances is undervalued by 21.0%. Track this in your watchlist or portfolio, or discover 883 more undervalued stocks based on cash flows.

Approach 2: International Flavors & Fragrances Price vs Sales

Price to Sales, or P/S, is often useful when you are looking at companies where revenue is a more stable reference point than earnings, for example when profits are volatile or affected by one off items. It tells you how many dollars investors are currently paying for each dollar of the company’s sales.

What counts as a “normal” or “fair” P/S depends on what investors expect for growth and how much risk they see in the business. Higher expected growth or lower perceived risk can justify a higher multiple, while slower expected growth or higher risk tends to go with a lower multiple.

International Flavors & Fragrances currently trades on a P/S of 1.65x, compared with an industry average of about 1.17x for Chemicals and a peer average of 2.30x. Simply Wall St’s Fair Ratio for the company is 1.93x. This is its proprietary estimate of what a reasonable P/S might be given the company’s growth profile, profit margins, industry, market value and specific risks. This Fair Ratio can be more tailored than a simple comparison with peers or the sector because it aims to adjust for those company specific factors. With the current P/S of 1.65x below the Fair Ratio of 1.93x, the shares screen as undervalued on this measure.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your International Flavors & Fragrances Narrative

Earlier we mentioned that there is an even better way to think about valuation, so let us introduce you to Narratives, which are simply your story about a company linked directly to your assumptions for its future revenue, earnings, margins and the fair value you think those numbers support.

On Simply Wall St, Narratives live in the Community page and give you an easy way to connect the company story you believe in with a financial forecast and a fair value estimate, then compare that fair value with the current share price to help you decide whether International Flavors & Fragrances might belong on your buy, hold or sell list.

Because Narratives update when new information arrives, such as company news or earnings releases, your view of fair value can stay aligned with what is actually happening rather than a static spreadsheet that quickly goes out of date.

For example, one International Flavors & Fragrances Narrative on the Community page might assume higher long term profit margins and a higher fair value estimate, while another assumes more modest margins and a lower fair value, showing how different investors can look at the same stock and reach very different conclusions.

Do you think there's more to the story for International Flavors & Fragrances? Head over to our Community to see what others are saying!

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.