International Flavors (IFF) Shares Drop 14.1% After Last Earnings: Is a Recovery Possible?

International Flavors & Fragrances: Recent Performance Overview

Over the past month, International Flavors & Fragrances (IFF) has seen its stock decline by approximately 14.1%, lagging behind the S&P 500 index.

Will the Downtrend Persist?

Investors are now questioning whether this negative momentum will continue as the company approaches its next earnings announcement, or if a turnaround is possible. To better understand the situation, let's review the latest financial results and key factors influencing the stock.

Fourth Quarter 2025 Results: Earnings and Sales

In Q4 2025, IFF reported adjusted earnings of $0.80 per share, falling short of the consensus estimate of $0.85. This compares to an adjusted EPS of $0.93 in the same period last year, which included costs related to divestitures, integration, and other one-off items. Excluding these, adjusted EPS was $0.97 in Q4 2024.

When factoring in non-recurring items, earnings came in at $0.07 per share, a notable improvement from a loss of $0.23 per share in the previous year.

Revenue for the quarter reached $2.59 billion, representing a 6.6% decrease year-over-year. However, this figure exceeded analyst expectations of $2.51 billion. On a currency-neutral basis, sales edged up by 1%, driven by moderate growth in Health & Biosciences and Scent segments, and slight gains in Taste.

Gross Margin and Expense Trends

IFF's cost of goods sold dropped 5.1% year-over-year to $1.7 billion. Gross profit declined by 9.1% to $891 million, with gross margin settling at 34.4%, down from 35.4% a year ago.

Research and development spending rose 2.4% to $174 million, while selling and administrative expenses increased by 12.8% to $383 million. Adjusted operating EBITDA was $437 million, a 7.2% decrease from last year's $471 million. The EBITDA margin was 16.9%, slightly lower than the prior year's 17%.

Segment Performance in Q4

• Taste: Sales grew 2.1% to $588 million, with adjusted operating EBITDA up 8% to $94 million.
• Food Ingredients: Sales declined 2.1% to $802 million, but adjusted operating EBITDA rose 18% to $82 million.
• Health & Bioscience: Sales increased to $586 million from $555 million, and adjusted operating EBITDA climbed 14% to $155 million.
• Scent: Sales advanced 5.5% to $610 million, while adjusted operating EBITDA remained unchanged at $106 million.

Cash Flow and Balance Sheet Updates

By the end of 2025, IFF held $590 million in cash and equivalents, up from $469 million at the close of 2024. Long-term debt decreased to $4.74 billion from $7.56 billion. Operating cash flow for 2025 was $850 million, down from $1.07 billion the previous year.

Full-Year 2025 Financial Highlights

Adjusted earnings for 2025 were $4.20 per share, missing the consensus estimate of $4.28 and slightly below last year's $4.22. Including one-off items, the company reported a loss of $1.46 per share, compared to earnings of $1.04 in 2024.

Annual revenue totaled $10.89 billion, a 5.2% decrease year-over-year, but surpassed expectations of $10.82 billion. Currency-neutral sales rose 2%, supported by higher volumes, improved productivity, and favorable pricing.

2026 Outlook

IFF anticipates fiscal 2026 sales between $10.5 billion and $10.8 billion, with adjusted EBITDA projected in the range of $2.05 billion to $2.15 billion.

Estimate Revisions and VGM Scores

Over the past month, analyst estimates have generally moved lower, resulting in a consensus estimate decrease of 7.58%.

Currently, IFF holds a Growth Score of D, but its Momentum Score is stronger at B. The Value Score is also B, placing the stock among the top 40% for this strategy. The overall VGM Score is C, which is relevant for investors not focused on a single approach.

Stock Outlook

With estimates trending downward and a Zacks Rank of #3 (Hold), IFF is expected to deliver performance in line with the broader market over the coming months.

Industry Comparison: Linde PLC

IFF operates within the Zacks Chemical - Specialty sector. Another company in this industry, Linde (LIN), has gained 3.7% in the past month. Linde's most recent quarterly results showed revenues of $8.76 billion, up 5.8% year-over-year, and EPS of $4.20, compared to $3.97 a year ago.

For the current quarter, Linde is projected to earn $4.27 per share, an increase of 8.1% from the previous year. The consensus estimate has remained stable over the past 30 days. Linde also holds a Zacks Rank #3 (Hold) and a VGM Score of C.

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