Jefferies says this flavors and fragrances producer can rally 40% from here

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A new CEO for cosmetics and flavors ingredient company International Flavors & Fragrances is a positive catalyst — and now is a perfect time for investors to buy the stock, according to Jeffries. The firm upgraded IFF shares to buy from hold after IFF announced the CEO change on Thursday , effective Feb. 6. Jefferies also raised its price target on the stock by 53%, to $112 from $73, implying shares could surge 40% from Thursday’s close. “The CEO change, in our view, finally positions IFF for several years of sustainable structural improvement,” analyst Laurence Alexander wrote in a Friday note. “The Q4 pre-release suggests operations are on track: the prospect of a fresh strategic vision should help narrow the wide valuation discount with peers.” IFF is next scheduled to report earnings on Feb. 14. Its shares are currently trading 32% lower than its European competitors and 12% below its five-year average, the Jefferies analyst noted. Alexander believes IFF’s ingredients segment is well-positioned to benefit from a restocking cycle that could stretch into 2026. While the company struggled with the rapid rise in interest rates that led to “unusual inventory destocking,” Alexander forecasts “smoother growth” as ingredients trends normalize. “IFF is a global leader in providing ingredients and solutions to the recession-resistant food & beverage, home & personal care and health & wellness markets. Their complementary product portfolios gave the combined company leadership positions (#1 or #2) across the key taste, texture, scent, nutrition, enzymes, cultures, soy proteins and probiotics categories,” the analyst said. IFF shares briefly jumped 4.5% during early trading Friday before giving back virtually all the gain. — CNBC’s Michael Bloom contributed to this report.