International Flavors & Fragrances Inc. shares rose 2.5% Thursday, after UBS upgraded the stock to buy from neutral and reiterated their view that the stock is a high quality laggard for 2017. The maker of fragrances used in foods as well as fabric care and household cleaning products has seen its price-earnings ratio fall to 21 times from 24 times before the November presidential election, when risk-off stocks were in favor, said UBS. That has meant it is now trading at a discount to peers versus a premium pre-election. "Underperformance reflects exaggerated risks on FX (80% of sales ex-U.S.), possible emerging market slowdown (50% of sales), & possible margin pressures from rising oil, vanilla & citrus," UBS analysts wrote in a note. "We are upgrading to Buy as the current valuation provides upside as we believe investor concerns are overdone." Shares have gained about 22% in the last 12 months, while the S&P 500 has gained about 23%.
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