Stock Analysis | International Flavors & Fragrances Outlook - Weak Technicals, Strong Fundamentals, and Mixed Analyst Signals

1. Market Snapshot

Headline Takeaway: International Flavors & Fragrances (IFF) is currently experiencing a weak technical outlook, but its fundamentals remain robust, with mixed analyst sentiments. Investors are advised to proceed cautiously.

2. News Highlights

Recent global economic and policy developments have stirred market sentiment across sectors. Here are key highlights likely to impact the broader market:

• Safex Chemicals Expands Manufacturing – Safex Chemicals has opened a new manufacturing facility in India, aiming to bolster production in crop protection and create 300 jobs. This could have a positive ripple effect on the chemical sector, indirectly supporting IFF.
• US Restricts Shipments to China – New restrictions on chip design software, chemicals, and other products to China could dampen demand in specific sectors and potentially affect global supply chains. IFF, with its international operations, may face indirect risks.
• ETF Growth in Asia Pacific – ETF assets in Asia Pacific (excluding Japan) reached a record $1.25 trillion, signaling strong investor confidence in the region. This could boost inflows into stocks like IFF in the long run.

3. Analyst Views & Fundamentals

Analysts remain split, with three institutions offering three different ratings in the last 20 days. The simple average rating is 3.67, while the performance-weighted rating is 4.35, reflecting slightly higher confidence in recent historical performance.

The current stock price has risen by 7.12%, aligning with the positive market expectations. However, analysts show some dispersion, with two "Buy" ratings and one "Neutral" rating.

Internally, our proprietary model gives IFF a fundamental score of 5.8 (internal diagnostic score, 10 = best). Here are the key fundamentals:

• Net cash flow from operating activities per share (YoY growth rate): 9.25% – internal diagnostic score: 2
• Equity multiplier: 1.81 – internal diagnostic score: 2
• PE ratio: 9.55 – internal diagnostic score: 2
• Cost of sales ratio: 63.17% – internal diagnostic score: 1
• Total profit / EBIT: 140.24% – internal diagnostic score: 2
• Cash-UP: 0.57 – internal diagnostic score: 3

These figures indicate a fundamentally sound company, with strong cash flow and manageable debt, but also a high cost of sales that may affect margins.

4. Money-Flow Trends

Big-money flows have been negative for IFF recently, with large, extra-large, and block investors showing outflows. However, retail investors (small and medium-sized) are showing a positive trend, suggesting retail confidence in the stock. The overall fund-flow score is 7.68 (internal diagnostic score, 10 = best), which is considered "good" despite the divergence between institutional and retail flows.

• Small investor inflow ratio: 50.14%
• Medium investor inflow ratio: 50.07%
• Large investor inflow ratio: 48.26%
• Extra-large investor inflow ratio: 46.05%

5. Key Technical Signals

The technical outlook for IFF is weak, with 5 bearish indicators and 0 bullish indicators over the last 5 days. Our proprietary technical score is 2.6 (internal diagnostic score, 10 = best), with a clear suggestion to avoid the stock.

Here are the key signals and their internal diagnostic scores:

• WR Oversold: 2.82 (internal diagnostic score)
• RSI Oversold: 2.76 (internal diagnostic score)
• MACD Golden Cross: 1.49 (internal diagnostic score)

Notable recent chart patterns include the MACD Golden Cross on 2025-08-20 and RSI Oversold and WR Oversold signals on 2025-08-08 and 2025-08-12. These signals suggest a potentially overbought market with a high risk of correction.

6. Conclusion

While IFF has strong fundamentals and is seeing positive retail investor sentiment, its technical indicators suggest caution. With five bearish signals and no bullish ones, and a technical score of just 2.6 (internal diagnostic score, 10 = best), the stock is currently in a weak position.

Investor Takeaway: Consider waiting for a pull-back or clearer technical improvement before entering a position. Keep an eye on upcoming earnings and any developments in the global chemical sector for further guidance.