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Ingredion (INGR)
NYSE:INGR
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Ingredion
(NYSE:INGR)72Outperform
Positive Factors
Balance Sheet and M&A
Strong balance sheet should support earnings growth via M&A and upside to share repurchase expectations.
Earnings Guidance
Management has raised its adjusted EPS guidance by approximately 5% following solid 3Q results, supporting an increase in the price target.
Operational Efficiency
The company's new approach to pricing, better manufacturing spending, and improved raw material procurement have led to expanded gross margins.
Negative Factors
Sales Decline
Despite decreases in sales, the company started the year with solid outperformance on profitability and expanding margins.
Valuation Concerns
Market Perform rating is reiterated owing to valuation sensitivity.
Valuation Sensitivity
Reiterate Market Perform owing to valuation sensitivity, though constructive on INGR’s outlook supported by ongoing volume recovery, lower corn prices, internal cost savings, organic growth projects, and ample cash for buybacks and M&A.
Ingredion (INGR) vs. S&P 500 (SPY)
Market Cap
$8.29B
Dividend Yield2.45%
Average Volume (3M)609.97K
Price to Earnings (P/E)13.3
Beta (1Y)0.54
Revenue Growth-8.95%
EPS Growth1.35%
CountryUS
Employees11,600
SectorConsumer Defensive
Sector Strength73
IndustryConsumer Products - Foods
Share Statistics
EPS (TTM)9.70
Shares Outstanding64,185,930
10 Day Avg. Volume698,937
30 Day Avg. Volume609,973
Financial Highlights & Ratios
PEG Ratio9.86
Price to Book (P/B)N/A
Price to Sales (P/S)1.13
Price to Cash Flow (P/CF)4.80
P/FCF Ratio4.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$158.40Price Target Upside22.59% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
Ingredion Business Overview & Revenue Model
Company DescriptionIngredion, Inc. manufactures and sells sweetener, starches, nutrition ingredients, and biomaterial solutions derived from the wet milling and processing of corn and other starch based materials. Its activities include turning corn, tapioca, potatoes and other vegetables and fruits into value added ingredients and biomaterials for the food, beverage, paper and corrugating, brewing, and other industries. The company was founded in 1906 and is headquartered in Westchester, IL.
How the Company Makes MoneyIngredion makes money by manufacturing and selling a wide range of ingredient solutions, including starches, sweeteners, and nutritional ingredients. The company's revenue primarily comes from supplying these ingredients to industries like food and beverage, where they are used to improve product quality, taste, and shelf life. Ingredion's revenue streams are diversified across its various product lines and geographic regions, ensuring a broad customer base. Key partnerships with major food and beverage manufacturers and a focus on R&D for innovative solutions also contribute to its earnings by fostering long-term customer relationships and expanding product offerings.
Ingredion Financial Statement Overview
Summary
Ingredion exhibits solid financial health with strong profitability and cash flow generation. The company has effectively managed its leverage and maintained a stable equity position. Despite a recent decline in revenue, Ingredion's operational efficiency and cash flow strength position it well for future resilience.Income Statement
Ingredion's income statement indicates strong profitability with a consistent gross profit margin and net profit margin over the years. However, a noticeable decline in revenue from 2023 to 2024 suggests potential challenges in maintaining growth. The company maintains healthy EBIT and EBITDA margins, reflecting operational efficiency.75
Positive
Balance Sheet
The balance sheet reflects a solid equity base with an improving equity ratio, showcasing financial stability. The debt-to-equity ratio has decreased, indicating better leverage management. However, the overall asset growth is modest, which may impact future expansion opportunities.72
Positive
Cash Flow
The cash flow statement demonstrates robust operating cash flow, significantly exceeding net income, which indicates strong cash generation ability. Free cash flow has seen substantial growth, enhancing financial flexibility. However, fluctuations in investing and financing cash flows suggest potential variability in capital allocation.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 7.43B | 8.16B | 7.95B | 6.89B | 5.99B | Gross Profit |
| 1.79B | 1.75B | 1.49B | 1.33B | 1.27B | EBIT |
| 883.00M | 957.00M | 762.00M | 709.00M | 582.00M | EBITDA |
| 1.18B | 1.17B | 978.00M | 543.00M | 801.00M | Net Income Common Stockholders |
| 647.00M | 643.00M | 492.00M | 117.00M | 348.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.01B | 409.00M | 239.00M | 332.00M | 665.00M | Total Assets |
| 7.44B | 7.64B | 7.56B | 7.00B | 6.86B | Total Debt |
| 1.83B | 2.40B | 2.48B | 2.05B | 2.32B | Net Debt |
| 834.00M | 2.00B | 2.25B | 1.72B | 1.66B | Total Liabilities |
| 3.55B | 4.05B | 4.30B | 3.77B | 3.79B | Stockholders Equity |
| 3.80B | 3.54B | 3.19B | 3.14B | 2.98B |
| Cash Flow | Free Cash Flow | |||
| 1.44B | 741.00M | -148.00M | 92.00M | 496.00M | Operating Cash Flow |
| 1.44B | 1.06B | 152.00M | 392.00M | 829.00M | Investing Cash Flow |
| -47.00M | -329.00M | -320.00M | -335.00M | -571.00M | Financing Cash Flow |
| -765.00M | -569.00M | 103.00M | -373.00M | 143.00M |
Ingredion Technical Analysis
Negative
129.21
Price Trends
132.62
Negative
136.81
Negative
129.77
Negative
Market Momentum
-0.83
Negative
45.45
Neutral
59.41
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For INGR, the sentiment is Negative. The current price of 129.21 is above the 20-day moving average (MA) of 128.54, below the 50-day MA of 132.62, and below the 200-day MA of 129.77, indicating a neutral trend. The MACD of -0.83 indicates Negative momentum. The RSI at 45.45 is Neutral, neither overbought nor oversold. The STOCH value of 59.41 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for INGR.
Ingredion Risk Analysis
Ingredion disclosed 27 risk factors in its most recent earnings report. Ingredion reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Ingredion Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $84.45B | 19.07 | 17.12% | 2.72% | 1.18% | -5.47% | |
73 Outperform | $28.43B | 21.22 | 35.58% | 2.74% | -16.16% | 41.01% | |
72 Outperform | $8.29B | 13.29 | 17.01% | 2.45% | -8.95% | 1.35% | |
66 Neutral | $12.16B | 24.89 | 5.60% | 5.37% | -2.00% | -50.02% | |
65 Neutral | $9.61B | 8.97 | 11.47% | 3.79% | -10.78% | -45.77% | |
63 Neutral | $20.85B | 13.27 | -10.88% | 7.48% | 1.13% | 11.50% | |
60 Neutral | $22.34B | 12.76 | 8.12% | 4.32% | -9.01% | -43.53% |
* Consumer Defensive Sector Average
Performance Comparison
INGR
Ingredion
129.21
15.81
13.94%
ADM
Archer Daniels Midland
45.80
-6.47
-12.38%
BG
Bunge Global
71.71
-17.97
-20.04%
CAG
Conagra Brands
25.39
-1.09
-4.12%
K
Kellanova
82.37
30.37
58.40%
MDLZ
Mondelez International
66.30
-2.82
-4.08%
Ingredion Earnings Call Summary
Earnings Call Date: Feb 4, 2025 | % Change Since: -4.10% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a generally positive sentiment with significant achievements such as double-digit EPS growth, record gross profits, and successful cost-saving programs. However, these positives were balanced by declines in net sales, particularly in certain segments, and challenges in the LATAM and 'All Other' categories.Highlights
Significant Double-Digit EPS Growth
Ingredion achieved significant double-digit adjusted EPS growth for the fourth quarter, driven by strong sales volume growth in Texture & Healthful Solutions and exceptional performance from Food & Industrial Ingredients segments.
Record Gross Profit and Margins
For the full year 2024, gross profit dollars and margins reached record levels of $1.8 billion with a corresponding margin of 24%, up 270 basis points compared to 2023.
Cost2Compete Program Success
Ingredion exceeded the year one run rate cost savings target of $18 million by more than 30% in their Cost2Compete program, with a future target of $50 million by end of 2025.
Recognition and Awards
Ingredion was recognized as one of the 250 Best-Managed Companies by the Wall Street Journal and was designated as a Great Place to Work in Brazil, Singapore, Thailand, China, Germany, Malaysia, and the UK.
Cash Flow and Shareholder Returns
2024 cash generated from operations was $1.4 billion, and the company returned $426 million to shareholders, more than doubling their initial share repurchase goal.
Lowlights
Net Sales Decline
Net sales for the fourth quarter were $1.8 billion, down 6% versus the prior year, impacted by lower price/mix and foreign exchange impacts.
LATAM Sales Volumes Decline
In the Food & Industrial Ingredients LATAM segment, net sales volumes were down 4% in the quarter due to soft sweetener sales in the Mexican beverage market and the Andean confectionery category.
Texture & Healthful Solutions Sales Decline
Texture & Healthful Solutions net sales were down 4% for the full year, with price/mix also down 10%, reflecting the pass-through of lower corn costs and lapping last year's higher pricing.
Operating Loss in 'All Other' Category
The 'All Other' category experienced an operating loss of $22 million, driven primarily by the sale of the South Korea business, which had contributed $30 million to the prior year's results.
Company Guidance
During Ingredion's earnings call for the fourth quarter and full year 2024, the company reported significant double-digit adjusted EPS growth, driven by a 4% increase in net sales volume and strong performance across its segments, particularly in Texture & Healthful Solutions. The Food & Industrial Ingredients U.S./Canada segment saw operating income growth due to the renewal of multiyear contracts, while LATAM achieved a 5% increase in operating income year-over-year. Ingredion's operating income increased by 22% in the fourth quarter, with gross profit margins up by 420 basis points to 25%. The company exceeded its Cost2Compete savings target by more than 30% and announced $100 million in investments to enhance capabilities and sustainability at the Indianapolis plant. For 2025, Ingredion expects low-single-digit net sales growth, mid-single-digit adjusted operating income growth, and capital expenditures between $400 million and $450 million. The guidance reflects anticipated volume demand, price/mix adjustments, and foreign exchange impacts.Ingredion Corporate Events
Business Operations and Strategy
Ingredion Unveils Strategies at 2024 Texture Innovation Day
Neutral
Nov 14, 2024
Ingredion Incorporated is set to showcase its upcoming 2024 Texture Innovation Day, where senior executives will present potential growth strategies. While these presentations may include forward-looking statements about future outcomes, they come with inherent risks and uncertainties. Investors should be aware that actual results could vary significantly from current expectations.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.