Lake Street analyst Ben Klieve reiterated a Buy rating on MGP Ingredients (MGPI – Research Report) today and set a price target of $135.00.
Ben Klieve has given his Buy rating due to a combination of factors including MGP Ingredients’ current valuation and expected future performance. Despite a year-to-date decline and a projected drop in revenue for Q1’24, Klieve finds the stock to be the most undervalued within the food & beverage sector. He anticipates that forthcoming updates on the company’s strategic initiatives and their brown goods segment will clarify MGP’s value and drive the stock’s performance in the near future. Additionally, he expects MGP to deliver significant returns as these strategies unfold during the rest of the year.
Klieve also notes that MGP Ingredients is not expected to outperform in the immediate Q1’24 earnings, but he believes that negative sentiment has already been factored into the stock price. The focus on the high-margin premiumization within the whiskey category is seen as a promising growth area, despite a slowdown in overall whiskey volume growth. Furthermore, Klieve is optimistic about the company’s operational changes, including the Atchison facility closure, Penelope Bourbon integration, and capacity expansions, which are projected to contribute to accelerated earnings growth in 2025. This potential for growth, combined with the current attractive valuation multiples, solidifies his confidence in MGP as a strong investment prospect.
According to TipRanks, Klieve is a 4-star analyst with an average return of 6.2% and a 45.83% success rate. Klieve covers the Consumer Defensive sector, focusing on stocks such as Vital Farms, MGP Ingredients, and Calavo Growers.
In another report released on April 10, Wells Fargo also maintained a Buy rating on the stock with a $100.00 price target.
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MGP Ingredients (MGPI) Company Description:
MGP Ingredients, Inc. engages in the manufacture and trade of food, beverage, specialty wheat protein, and starch food ingredients. It operates through the following segments: Distillery Products and Ingredient Solutions. The Distillery Products segment consists of food grade alcohol and distillery co-products, such as distillers feed and fuel grade alcohol. This segment also includes warehouse services, including barrel put away, barrel storage, and barrel retrieval services. The Ingredient Solutions segment consists of specialty starches and proteins and commodity starches and proteins. The company was founded by Cloud L. Cray in 1941 and is headquartered in Atchison, KS.
