Jefferies Thinks Ingredion’s Stock is Going to Recover

By Ryan Adsit

Jefferies analyst Akshay Jagdale reiterated a Buy rating on Ingredion (NYSE: INGR) today and set a price target of $145. The company’s shares closed yesterday at $110.77, close to its 52-week low of $107.77.

Jagdale observed:

“Yesterday AMC, INGR pre-announced 2Q results & lowered 2018 EPS guidance by 5% owing to weaker than expected HFCS demand in NA. While disappointing, HFCS is a fairly small portion of INGR’s overall portfolio & has been in secular decline for some time. Our LT thesis is predicated more on Specialty business growth, which remains on track, while the newly announced cost savings program should accelerate margin expansion. We reiterate our Buy rating & $145 PT.”

According to TipRanks.com, Jagdale is a 4-star analyst with an average return of 5.7% and a 55.3% success rate. Jagdale covers the Consumer Goods sector, focusing on stocks such as Lamb Weston Holdings, McCormick & Company, and J & J Snack Foods.

The word on The Street in general, suggests a Moderate Buy analyst consensus rating for Ingredion with a $130 average price target.

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Based on Ingredion’s latest earnings release for the quarter ending March 31, the company reported a quarterly revenue of $1.47 billion and net profit of $140 million. In comparison, last year the company earned revenue of $1.46 billion and had a net profit of $130 million.

Based on the recent corporate insider activity of 82 insiders, corporate insider sentiment is negative on the stock.

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Ingredion, 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. It operates through the following geographical segments: North America, South America, Asia Pacific, and Europe, the Middle East, and Africa. The company was founded in 1906 and is headquartered in Westchester, IL.