IFF Sales Setback

International Flavors & Fragrances stock took a hit, plunging on Wednesday following disappointing sales guidance and a dividend cut.

Stock Performance

Shares of International Flavors dropped to $75, a significant 8.6% decline, marking the largest percentage decrease since Aug. 8, 2023. According to Dow Jones Market Data, the stock ranked as the second-worst performer in the S&P 500 on Wednesday, with a 22% decrease over the past year.

Sales Forecast

The company revealed a bearish outlook after Tuesday's trading session, with 2024 revenue expected to range between $10.8 billion and $11.1 billion. This falls short of analysts' consensus of $11.42 billion and represents a downturn from the $11.48 billion generated in 2023.

CEO Outlook

Chief Executive Erik Fyrwald expressed cautious optimism about improving financial performance for shareholders in 2024 amidst prevailing uncertainties in the business landscape.

Dividend Cut

In a bid to enhance financial flexibility, International Flavors announced a significant reduction of its quarterly dividend by around 50% to 40 cents per share. The move aims to save approximately $410 million per year, primarily for accelerated balance sheet deleveraging, as per the company's statement.

Analyst Perspective

Commenting on the dividend cut, Stifel analyst Mark Astrachan noted that the decision could help IFF with balance sheet optimization. He slashed his price target on the stock from $87 to $80 following the news.

Q4 Performance

For the fourth quarter, International Flavors reported earnings of 72 cents per share, falling short of Wall Street's estimates of 76 cents. However, the revenue of $2.7 billion was in line with market expectations.