Food ingredients maker Sensient beats Q2 profit view, misses revenue estimates

Overview

• Sensient Q2 revenue rises 2.7% but misses analyst expectations, per LSEG data

• Food ingredients maker's adjusted EPS for Q2 beats consensus, rising 20.8% yr/yr

• Operating income increases 16.2% to $57.7 mln, driven by Color Group growth

Outlook

• Sensient expects 2025 diluted EPS between $3.13 and $3.23

• Expects 2025 local currency adjusted EPS of high single-digit to double-digit growth

• Company anticipates high single-digit growth in adjusted EBITDA for 2025

• Sensient forecasts mid-single-digit growth in local currency revenue

Result Drivers

• COLOR GROUP GROWTH - Revenue increase driven by strong growth in food and pharmaceutical product lines

• FLAVORS & EXTRACTS DECLINE - Revenue impacted by lower volumes in natural ingredients, partially offset by higher volumes in flavors and extracts

• ASIA PACIFIC EXPANSION - Revenue growth across nearly all geographies in Asia Pacific region

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the specialty chemicals peer group is "buy"

• Wall Street's median 12-month price target for Sensient Technologies Corp is $99.00, about 11.1% below its July 24 closing price of $110.00

• The stock recently traded at 31 times the next 12-month earnings vs. a P/E of 22 three months ago

Press Release: ID:nBw3vgJvra