IPAR Stock Study (12-1-25)

Posted by Mark on May 19, 2025 at 06:50 | Last modified: December 2, 2025 07:49

I recently studied Inter Parfums Inc. (IPAR, $81.27). The previous study is here.

M* writes:

     > Inter Parfums Inc operates in the fragrance business and produces
     > and distributes a wide array of prestige fragrance and fragrance-
     > related products. It sells its product under the brand which includes
     > Boucheron, Coach, Jimmy Choo, Karl Lagerfeld, Kate Spade, Lacoste,
     > Lanvin, Moncler, Montblanc, Rochas and Van Cleef & Arpels. The
     > company operates in two operating segments namely European based
     > operations, SA, and United States based operations. The group sells
     > its products to department stores, perfumeries, specialty stores,
     > and domestic and international wholesalers and distributors.

Over the past decade, this medium-size company has grown sales and EPS at annualized rates of 13.0% and 21.0%, respectively. Lines are mostly up, straight, and parallel except for a sales+EPS decline in ’20 (COVID-19). Five- (10-) year R^2 is 0.86 (0.87) and Value Line (VL) gives an Earnings Predictability score of 60.

Over the past decade, PTPM leads peer averages but trails the industry while increasing from 12.9% (’15) to 18.9% (’24) with last-5-year mean of 17.1%. ROE increases from 8.1% (’15) to 21.1% (’24) with last-5-year mean of 17.4%. Debt-to-Capital is less than peer and industry averages while ranging from 8.7% in ’20 to 25.4% in ’22 with a last-5-year mean of 20.1%.

Quick Ratio is 1.9 and Interest Coverage 36 per M* who assigns “Narrow” [quantitative] Economic Moat and gives a B grade for Financial Health (per BI website). VL rates the company B++ for Financial Strength.

With regard to sales growth:

• YF gives YOY ACE 1.2% and 0.9% for ’25 and ’26, respectively (based on 4 analysts).
• Zacks gives YOY ACE 1.2% and 0.5% for ’25 and ’26, respectively (2 analysts).
• VL projects 2.9% annualized growth from ’24-’29.
• CFRA gives ACE YOY 1.2% and 1.0% per year for ’25 and ’24-’26, respectively (4).
• M* gives 2-year ACE of 0.7% growth/year.

My flat forecast is below the range.

With regard to EPS growth:

• MarketWatch projects 6.9% per year each for ’24-’26 and ’24-’27, respectively (based on 5 analysts).
• Nasdaq.com gives ACE contraction of 5.9% YOY and 0.4% per year for ’26 and ’25-’27 [2/2/1 analyst(s) for ’25/’26/’27].
• Seeking Alpha projects 4-year annualized growth of 13.8%.
• Finviz gives 5-year annualized growth of 2.4% (1).
• LSEG estimates LTG at 8.9%.
• YF gives YOY ACE contraction of 1.8% and 5.4% for ’25 and ’26, respectively (4).
• Zacks gives YOY ACE contraction of 1.7% and 5.9% for ’25 and ’26, respectively (2).
• VL projects 2.8% annualized growth from ’24-’29.
• CFRA gives ACE of 0.0% YOY and 2.8% contraction per year for ’25 and ’24-’26, respectively (4).

My 2.0% per year forecast is below the long-term estimate range (average of four: 7.0%). Initial value is ’24 EPS of $5.12/share.

My Forecast High P/E is 28.0. Over the past 10 years, high P/E ranges from 28.7 in ’22 to 42.8 in ’19 (excluding upside outlier of 62.0 in ’20) with a last-5-year mean of 33.1 and a last-5-year-mean average P/E of 27.3. I am below the 10-year range.

My Forecast Low P/E is 12.0. Over the past 10 years, low P/E ranges from 17.1 in ’22 to 30.8 in ’19 with a last-5-year mean of 21.6. I am forecasting far below the range.

My Low Stock Price Forecast (LSPF) of $61.40 is default based on initial value given above. This is 24.4% less than the previous close and 20.5% less than the 52-week low.

Over the past decade, Payout Ratio (PR) ranges from 27.3% in ’20 to 60.8% in ’19 with a last-5-year mean of 45.6%. I am forecasting below the range at 27.0%.

These inputs land IPAR in the BUY zone with a U/D ratio of 3.9. Total Annualized Return (TAR) is 15.2%.

PAR (using Forecast Average—not High—P/E) of 8.2% is less than I seek for a medium-size company. If a healthy margin of safety (MOS) anchors this study, then I can proceed based on TAR instead.

To assess MOS, I compare my inputs with those of Member Sentiment (MS). Based on only 49 studies in the past 90 days (my study and 26 other outliers excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, Forecast Low P/E, and PR are 5.3%, 7.9%, 29.9, 19.9, and 46.0%, respectively. I am lower across the board. VL projects a future average annual P/E of 23.5 that is less than MS (24.9) and greater than mine (20.0).

MS high / low EPS are $7.43 / $4.94 versus my $5.65 / $5.12 (per share). My high EPS is less due to a lower growth rate. VL’s high EPS of $5.95 is in the middle.

MS LSPF of $80.00 implies a Forecast Low P/E of 16.2: less than the above-stated 19.9. MS LSPF is 18.6% less than the default $4.94/share * 19.9 = $98.31 (INVALID on today’s date) resulting in more conservative zoning. MS LSPF is still 30.3% higher than mine, though.

MOS is robust in the study because my inputs are near or below historical/analyst/MS averages/ranges. I am discounting growth rates to [near] zero [N.B. thereby excluding IPAR from the “quality growth stock” category]. Also backing this assessment are MS TAR exceeding mine by 5.7% per year and my significantly lower LSPF.

With regard to valuation, PEG is 0.41 and 7.8 (low growth rate) per M* and my projected P/E, respectively: in wild disagreement. Relative Value [(current P/E) / 5-year-mean average P/E] is quite low at 0.58. M* says undervalued by 21%.

Per U/D, IPAR is a BUY under $85.60/share. BI TAR criterion would be met [158.3 / ((13.87 / 100 ) +1 ) ^ 5] ~ $82.70 given a forecast high price ~$158.

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