economy
Buy this natural food dye maker as U.S. firms switch from artificial alternatives, UBS says
The bank initiated coverage with a buy rating.
TL;DR
- UBS initiated coverage of Sensient Technologies with a buy rating and a $115 price target.
- The bank predicts a large shift from synthetic food dyes to natural color ingredients by U.S. grocers and food producers.
- This shift is expected to increase in the second half of 2026 to meet customer targets at the start of 2027.
- Sensient is the world's largest producer of natural colors, with approximately 60% of its sales in North America.
- UBS estimates that growing adoption of natural food colorings could lead to over a 200% increase in Sensient's color group sales by 2030.
- The bank believes this growth is not yet reflected in the stock price, which is trading at a slight premium to average.
- Currently, two out of three Wall Street analysts covering Sensient have a buy rating, and one has a hold.