Ashland and IFF Expected to Hold Guidance Steady, Wolfe Research Says

Wolfe Research expects specialty ingredients companies Ashland (ASH) and International Flavors & Fragrances (IFF) to provide stable fiscal 2026 guidance in their upcoming reports. The firm maintains a Market Weight rating on the ingredients sector, citing a mix of resilient end-markets and mounting cost pressures.

Company-Specific Outlooks

For Ashland, Wolfe Research anticipates positive management commentary on personal care and life sciences trends. However, the firm noted that rising costs and unspecified "Hopewell-related factors" could present potential headwinds for the company.

Regarding International Flavors & Fragrances, the analysis projects a second quarter that aligns with expectations and a stable full-year outlook. This is despite the impact of increasing household costs on consumer spending. Wolfe Research stated that a key focus for investors will be the performance of IFF's various segments relative to its European peers.

Sector-Wide Pressures

Wolfe Research is monitoring several broader trends impacting the ingredients sector. The firm highlighted that commentary from management teams on pricing and costs, including freight and logistics expenses, will be critical for second-half outlooks.

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Key factors under observation include:

• Potentially higher input costs for companies.
• Cautious consumer spending habits.
• Raw material inflation, which is expected to affect performance in late 2026 and continue into 2027.

Diverging End-Market Trends

The report outlined a varied performance across different markets. Health, beauty, and personal care segments are showing strength, with positive indicators for hair and skin care products expected to support second-half results. Life sciences are also projected to improve, driven by higher volumes in outsourced service delivery and better pricing.

Conversely, weakness is evident in grocery volumes and industrial sectors, leading to mixed results for taste and food ingredients. In the scent market, Wolfe noted that while fine fragrance appears resilient, IFF's performance could be flat to a low-single-digit decline due to difficult year-over-year comparisons.