On Thursday, BMO Capital Markets adjusted its outlook on Ingredion (NYSE:INGR) shares, a company traded on the New York Stock Exchange under the ticker NYSE:INGR. The firm increased its price target to $120 from the previous target of $117, while maintaining a Market Perform rating.
Ingredion reported first-quarter earnings per share (EPS) of $2.08, slightly surpassing the consensus estimate by $0.02. This outperformance was primarily due to lower interest expenses, which helped mitigate the impact of higher taxes, leaving the operating profit as expected. Following these results, Ingredion has revised its EPS guidance for 2024, raising the lower end by $0.05 to a new range of $9.20 to $9.85.
Additionally, the company has announced plans to implement $50 million in cost savings by 2025 and anticipates an acceleration in its stock buyback program throughout the remainder of 2024.
BMO Capital's analyst highlighted confidence in Ingredion's ability to reach the higher end of its 2024 earnings outlook. This optimism is supported by the company's incremental efficiencies and the expected impact of share repurchases.
However, the analyst noted that the benefits are likely to be more pronounced in the second half of the year, as the second-quarter guidance falls short of their forecasts.
The adjustment in the price target to $120 reflects a change in BMO Capital's valuation methodology, now extending into 2025. Despite the increased target and positive outlook on Ingredion's financial guidance, the firm's valuation perspective remains cautious, with the Market Perform rating indicating a neutral stance on the stock's investment potential.
InvestingPro Insights
Following BMO Capital Markets' updated stance on Ingredion, a deeper dive into the company's financial health using InvestingPro data reveals additional insights. Ingredion boasts a strong Market Cap of approximately $7.77 billion, and its current P/E Ratio stands at an attractive 11.68. Despite a slight decrease in revenue over the last twelve months as of Q1 2024, the company maintains a robust Gross Profit Margin of 21.24% and an Operating Income Margin of 11.21%, underscoring its ability to manage costs effectively.
Two key InvestingPro Tips further enhance the picture: Ingredion has a perfect Piotroski Score of 9, indicating a high level of financial soundness, and it has consistently rewarded shareholders by raising its dividend for 13 consecutive years. This commitment to shareholder returns is particularly relevant for investors looking for stable income streams. Additionally, with a dividend yield of 2.63% as of the end of March 2024, Ingredion continues to be an attractive option for dividend-focused portfolios.
Investors interested in a more comprehensive analysis can find additional InvestingPro Tips on Ingredion by visiting https://www.investing.com/pro/INGR. For those looking to delve deeper into the data and gain access to exclusive insights, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With over 10 additional InvestingPro Tips available, including insights on valuation, earnings revisions, and stock volatility, investors can make more informed decisions backed by real-time data and expert analysis.
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