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Ingredion Inc INGR

Rating as of

Morningstar’s Analysis

Valuation
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Maintaining $120 Fair Value Estimate as Ingredion Recovery on Track; Shares Undervalued

Seth Goldstein, CFA Senior Equity Analyst

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.

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Company Profile

Business Description

Ingredion manufactures ingredients for the food, beverage, paper, and personal-care industries. Sweeteners (syrups, maltodextrins, dextrose, and polyols) account for about 35% of sales, starches (for food and industrial use) around 45%, and co-products the balance. Value-added, specialty ingredients account for nearly one third of sales, with the balance being commodity-grade ingredients. With the majority of sales outside the U.S., Ingredion is a global player with good exposure to developing markets, including Latin America and Asia-Pacific.

Contact
5 Westbrook Corporate Center
Westchester, IL, 60154
T +1 708 551-2600
Sector Consumer Defensive
Industry Packaged Foods
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2020
Stock Type Slow Growth
Employees 12,000

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