On Wednesday, Jefferies made a significant adjustment to its stance on Symrise AG (ETR:SY1G) (SY1:GR) (OTC: SYIEY), a global supplier of fragrances and flavorings. The firm's analyst, representing Jefferies, shifted the rating from Buy to Hold and concurrently lowered the price target to €120.00 from the previous €134.00.
The adjustment in Symrise's stock rating was accompanied by a revision of the company's EBITDA estimates, which were decreased by approximately 1% for the mid-term. Despite the reduction, Jefferies' estimates remain about 2% higher than the consensus. The analyst cited a combination of factors for the reduced price target, including valuation multiples, which account for roughly half of the target reduction, and earnings projections.
Symrise's forecast for fiscal year 2025 remains above consensus expectations. However, the margin differentials have narrowed, and there are heightened execution risks. The upcoming Corporate Management Decision (CMD) is expected to reveal additional cost savings. Jefferies expressed concerns that these savings might affect Symrise's top-tier organic growth.
In a broader industry context, Jefferies has moderated its preference for the Ingredients sector compared to Gases. The firm's preference is leaning towards companies with the most robust earnings delivery projected for fiscal years 2025 and 2026, highlighting DSFIR, NSISB, and CRDA as preferred entities.
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