Wolfe Research sees stable guidance for Ashland and IFF

Investing.com -- Wolfe Research expects Ashland to provide stable fiscal 2026 guidance alongside positive commentary on personal care and life sciences trends, though rising costs and Hopewell-related factors may present headwinds.

For International Flavors & Fragrances, the firm anticipates a second quarter that aligns with expectations, with a stable fiscal 2026 outlook despite increasing household costs. The focus remains on segment growth performance relative to European peers.

Wolfe Research maintains a Market Weight rating on the ingredients sector. The firm monitors potentially higher input costs and cautious consumer trends, with recent Middle East tensions affecting perceptions across both areas. Commentary on pricing and costs will be important for second-half outlooks, including freight and logistics expenses. Raw material inflation is expected to impact late 2026 and continue into 2027.

End-market trends show balanced strengths in health and beauty and personal care against weaknesses in grocery volumes and industrial sectors.

In scent markets, fine fragrance appears resilient, but Wolfe forecasts IFF to be flat to low-single-digit percentage decline due to difficult comparisons in fine fragrance. Personal care should perform well based on positive indicators for hair and skin care products, providing support for second-half narratives.

The firm expects mixed results in taste and food ingredients due to sluggish grocery spending patterns. Health and beauty should remain stable, with health probiotics and food cultures and enzymes expected to be bright spots. Life sciences trends should continue to improve due to higher outsourced service delivery volumes and improving pricing trends.

Wolfe anticipates South America volumes to see stabilization or slight growth from a lower baseline, consistent with peer commentary.

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