On Wednesday, Stephens analyst Ben Bienvenu adjusted the price target for Ingredion (NYSE:INGR), a global ingredients solutions company, to $150 from the previous target of $155, while maintaining an Equal Weight rating on the company’s shares. The revision follows Ingredion’s fourth-quarter financial results for 2024, where the company reported an adjusted earnings per share (EPS) of $2.65. This figure surpassed both Stephens’ estimate of $2.54 and the consensus estimate of $2.57. According to InvestingPro data, Ingredion currently trades at an attractive P/E ratio of 13.9x and has maintained dividend payments for 28 consecutive years.
Ingredion’s adjusted EBIT for the quarter was $248 million, which fell short of Stephens’ projection of $258 million but was slightly below the consensus estimate of $250.1 million. Looking ahead, Ingredion has provided guidance for fiscal year 2025, anticipating approximately 5% growth in EPS at the midpoint. The company also expects mid-single-digit sales growth, which it attributes largely to volume increases in its Texture and Healthful Solutions segments. With trailing twelve-month revenue of $7.43 billion and EBITDA of $1.22 billion, the company maintains a strong financial position, earning a "GREAT" overall health score from InvestingPro.
The company has projected margin expansion of 30 to 70 basis points for the upcoming year, with the expansion primarily driven by the Texture & Healthful Solutions and Latin America (LATAM) segments, while margins in the U.S. and Canada are expected to remain stable rather than increase.
Bienvenu noted that Ingredion’s guidance suggests confidence in maintaining its current momentum. However, he also mentioned a slight execution risk as the company’s revenue growth begins to rely more heavily on volume growth. The analyst stated that if Ingredion can demonstrate sustainable volume growth over the subsequent quarters, investors might view the company more favorably.
In conclusion, despite lowering the price target to $150, Stephens reiterated its Equal Weight (Voluntary) rating on Ingredion shares, indicating a neutral stance on the stock’s current valuation and future prospects.
In other recent news, ingredient solutions provider, Ingredion, has been making headlines with various developments. Oppenheimer analysts recently adjusted their outlook on Ingredion, reducing the price target from $178.00 to $167.00, but maintained an Outperform rating. This followed Ingredion’s fourth-quarter earnings report and a conservative forecast for 2025. Despite a strong quarter, a broad range of potential outcomes for 2025, influenced by foreign exchange rates and volume variability, has somewhat dampened investor enthusiasm.
In the fourth quarter, Ingredion posted earnings per share (EPS) of $2.63, which was $0.10 higher than the analyst consensus. However, the company’s revenue for the quarter was reported at $1.8 billion, falling short of the consensus estimate of $1.82 billion. Analyst Arun Sundaram from CFRA expressed optimism about Ingredion’s future, raising the 12-month target price to $174 from $143 and increasing the 2025 EPS estimate to $11.58.
In terms of operational changes, Ingredion announced plans to cease operations at its Vanscoy, Saskatchewan manufacturing facility, incurring a pre-tax non-recurring charge of approximately $66 million. The decision is part of a strategic shift within the company, and approximately 20 employees will be affected by this closure.
Lastly, Ingredion reported its best third-quarter results, with a 29% increase in adjusted operating income, despite a net sales decline. This was attributed to the company’s strategic initiatives and operational efficiencies. These are the recent developments in Ingredion’s business operations.
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