Ingredion Incorporated (NYSE:INGR) came out with its annual results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Ingredion reported US$8.2b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$9.60 beat expectations, being 2.6% higher than what the analysts expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Ingredion after the latest results.
Taking into account the latest results, Ingredion's six analysts currently expect revenues in 2024 to be US$8.09b, approximately in line with the last 12 months. Statutory per share are forecast to be US$9.91, approximately in line with the last 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$8.39b and earnings per share (EPS) of US$9.79 in 2024. So it looks like the analysts have become a bit less optimistic after the latest results announcement, with revenues expected to fall even as the company is supposed to maintain EPS.
The average price target was steady at US$124even though revenue estimates declined; likely suggesting the analysts place a higher value on earnings. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Ingredion at US$136 per share, while the most bearish prices it at US$115. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that revenue is expected to reverse, with a forecast 0.8% annualised decline to the end of 2024. That is a notable change from historical growth of 6.9% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 2.5% annually for the foreseeable future. It's pretty clear that Ingredion's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Still, earnings per share are more important to value creation for shareholders. The consensus price target held steady at US$124, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Ingredion analysts - going out to 2026, and you can see them free on our platform here.
You still need to take note of risks, for example - Ingredion has 1 warning sign we think you should be aware of.
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