Analyst Note| Seth Goldstein, CFA |
Ingredion reported solid first-quarter results as adjusted operating income was up 20% year on year versus the prior-year quarter. The growth was driven by higher prices, a mix shift toward specialty ingredients, and lower costs, even as companywide volumes were flat. The results were in line with our long-term outlook for the company. As Ingredion sells a higher proportion of specialty ingredients, we expect the company will benefit from higher profits, even if volumes stay flat. With our long-term outlook intact, we maintain our $120 per share fair value estimate for Ingredion. Our narrow moat rating is also unchanged.