International Flavors Stock Is the Worst Performer in the S&P 500. Here’s Why.

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International Flavors & Fragrances’s sales drop came despite an increase in prices.

Patrick Kovarik/AFP via Getty Images

International Flavors & Fragrances

stock was tumbling Tuesday after the scent and flavor maker cut its full-year sales outlook as customer demand weakened.

International Flavors

(ticker: IFF) said after the markets closed Monday that it now expects full year 2023 sales to be between $11.3 billion to $11.6 billion, which was a cut to the previous guidance of $12.3 billion. The decrease was due to expectations that volumes in the second half of 2023 would no longer recover as previously anticipated.

The company also expects adjusted earnings before interest, taxes, depreciation and amortization for the full year to be between $1.85 billion to $2 billion, down from its previous guidance of $2.34 billion.

“We anticipate IFF shares trade down meaningfully on the result, and rightfully so, as the company has reduced 2023 guidance three times since its December 2022 investor meeting,” Stifel analyst Mark Astrachan said in a research note.

Astrachan downgraded shares of International Flavors to Hold from Buy and cut his price target to $85 from $123. He wrote that this downgrade was due to “the lack of visibility into improving volume trends,” and the company’s competitive position.

International Flavors didn’t immediately respond to a Barron’s request for comment.

International Flavors also reported second quarter earnings of 86 cents a share on revenue of $2.93 billion. Analysts surveyed by FactSet were expecting earnings of $1.10 a share on…

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