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On Wednesday, Oppenheimer analysts adjusted their outlook on Ingredion stock (NYSE: NYSE:INGR), reducing the price target from $178.00 to $167.00, while maintaining an Outperform rating. The modification follows a notable 5.6% decline in Ingredion’s share value on Tuesday, contrasting with a 0.72% rise in the S&P 500 on the same day. The price adjustment was made in the wake of Ingredion’s fourth-quarter earnings report and its conservative forecast for the year 2025.
According to Oppenheimer, the market had high expectations ahead of the earnings release. Despite a strong fourth-quarter performance, with EBITDA reaching $1.22 billion, the broad range of potential outcomes for 2025 presented by the company, influenced by foreign exchange rates and volume variability, has somewhat dampened investor enthusiasm. The analysts highlighted that the sell-off on Tuesday was a reaction to these factors. InvestingPro analysis indicates the stock is currently in oversold territory, with additional ProTips available for subscribers.
The report from Oppenheimer was positive about Ingredion’s volume recovery in the T&H (Texturizer and Health) segment, noting that it is anticipated to lead operating income growth into 2025. The analysts expressed encouragement by this momentum, which they expect to continue.
In light of the new guidance provided by Ingredion and a more moderate outlook, Oppenheimer has trimmed their estimates. Despite the reduction in the price target to $167.00, the analysts reaffirmed their Outperform rating on the stock, signaling continued confidence in the company’s performance.
The market’s reaction to Ingredion’s conservative 2025 outlook, as well as the subsequent analysis by Oppenheimer, will be watched closely by investors as they assess the company’s long-term growth potential and position within the industry. Notably, InvestingPro data shows the company has maintained dividend payments for 28 consecutive years, demonstrating strong financial stability. For comprehensive analysis including Fair Value estimates and detailed financial health scores, investors can access the full Pro Research Report, available with an InvestingPro subscription.
In other recent news, Ingredion Incorporated reported a fourth-quarter revenue shortfall, with earnings coming in at $1.8 billion, not meeting the consensus estimate of $1.82 billion. Despite exceeding earnings per share (EPS) expectations, the revenue miss raised investor concerns. The company also provided its full-year 2025 EPS guidance, projecting a range of $10.75 to $11.55, which encompasses the consensus estimate of $11.12. Amid these developments, CFRA analyst Arun Sundaram expressed optimism, raising the 12-month target price for Ingredion to $174 from $143 and increasing the 2025 EPS estimate to $11.58.
In another development, Ingredion announced plans to cease operations at its Vanscoy, Saskatchewan manufacturing facility. This decision, part of a strategic review, anticipates a pre-tax non-recurring charge of approximately $66 million, expected mainly in the fourth quarter of 2024. The company has expressed intentions to sell the facility and its underlying property.
In its third-quarter results, Ingredion reported a 29% increase in adjusted operating income, marking the company’s best third quarter, despite a net sales decline. The company attributed this robust performance to strategic initiatives and operational efficiencies, with improved margins due to reduced raw material costs and higher sales volumes. The company also highlighted progress on a $50 million cost savings program and improved contract management.
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