International Flavors & Fragrances (IFF) has said it would consider strategic options for its underperforming food additives unit, but with management's recent emphasis on margin improvement and building growth, it's unlikely a sale is imminent, analysts at UBS said on Monday in a research note.

Absent Food Ingredients, organic growth at IFF probably would be about 80 basis points higher while earnings before interest, taxes, depreciation and amortization margins would increase around 250 points and the ratio of EBIT-to-tangible invested capital climbing as much as 450 basis points higher, justifying a future sale, the UBS analysts said.

Overall, the UBS analysts reiterated their neutral rating for IFF with an $83 price target for the company's shares, reflecting a multiple of about 12.5 times its projected EBITDA of $2.18 billion over the next 12 months. They said neither sales nor per-share earnings are likely to keep pace with those metrics at its peers this year although IFF should begin to close those gaps in 2026.

"The core of heritage IFF (Taste and Scent) appears to be doing well, growing at or above the level of peers," the UBS analysts said, adding that was "a positive that the core of legacy of IFF appears to be performing better."

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