IFF (IFF) was lifted to Overweight from Equal-Weight at Morgan Stanley on Monday, with the firm's analysts raising the stock price target to $90 from $81 per share.
The analysts said in a note that they see upside risk to the company's FY24/25 adjusted earnings per share consensus estimate at a compelling valuation.
"We think IFF's downgrade cycle (excl. M&A) has come to an end alongside bottoming of the consumer cycle," said the analysts. "We believe IFF can deliver +14.8% Adj EBITDA growth this year for 80% via internal, largely controllable drivers, which positions us ~12% ahead of FY24 Adj EPS cons (+11% for FY25)."
They added that, arguably, 2024 could still be partly a year of transition for the company, but they think investors will look through this with the stock "screening cheap."
"The shares appear compelling trading on 12.9x 2024 EBITDA, a -36% discount to key peers GIV/SYM," the analysts concluded.