Valuation Scorecard: Stock Rating C-High Neutral (5/3/24)-Ingredion Inc (INGR).

At the current price of $115, what are market expectations regarding Ingredion’s future operating performance? To achieve average annual stock market performance of 9.0% over the next 6 years, Ingredion shares will need to reach $192. To achieve Upper quartile performance, Ingredion’s stock price will need to reach $226 by 2029.

Executive Summary

• Price Target Research identifies Ingredion as having: high profitability, instability, below average expected growth, and below average financial strength.
• Low valuation, leading shareholder returns. Current valuation levels are below average relative to the Ingredion Peer Group. Recent market returns have significantly outperformed the Ingredion Peer Group. Total shareholder returns expected to seriously beat the overall equity market. Based on current investor expectations, Ingredion shares should reach a level of $187 by 2029 — an 11.1% per year total shareholder return. A 2029 stock price of $192 would reflect median performance and a price of $226 would be required to reach upper quartile performance.
• Ingredion’s achieved growth is average. Historical growth has been average relative to the Ingredion Peer Group and forecasted growth is relatively below average. EPS Growth has been superior. Asset Growth has lagged. Ingredion’s historical income statement growth and balance sheet growth have diverged. Revenue growth has paralleled asset growth; earnings growth has exceeded equity growth resulting in an improving return on equity. Ingredion’s consensus growth expectations are lower than historical growth.
• Return on Equity, and Pretax Margin are group leading. These factors have strengthened market perceptions of Ingredion. The company has normal cash needs.
• Ingredion’s risk profile is neutral. Overall variability has been only average with only average revenue variability, very high E.P.S. variability, and relatively low stock price volatility. Financial Strength is below average and earnings’ expectations are relatively high. The debt/capital ratio has declined.

Click to read the full Scorecard report