Core Viewpoint - Ingredion (INGR) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is effective for individual investors as it focuses on earnings estimate revisions, which are crucial for near-term stock price movements [2][4]. - Changes in earnings estimates are strongly correlated with stock price movements, particularly due to institutional investors adjusting their valuations based on these estimates [4]. Company Performance and Outlook - The upgrade for Ingredion reflects an improvement in its underlying business, suggesting that investor sentiment may lead to increased stock prices [5]. - Over the past three months, the Zacks Consensus Estimate for Ingredion has increased by 1.4%, with expected earnings of $11.36 per share for the fiscal year ending December 2025, indicating no year-over-year change [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7]. - The upgrade to Zacks Rank 2 places Ingredion in the top 20% of Zacks-covered stocks, suggesting a strong potential for market-beating returns in the near term [10].

Part I Financial Information [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for Ingredion Incorporated for the three and six months ended June 30, 2025, and 2024, including income, comprehensive income, balance sheets, equity changes, and cash flows, with accompanying notes [Condensed Consolidated Statements of Income](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) Q2 2025 net sales decreased to $1,833 million, while net income attributable to Ingredion increased to $196 million, with year-to-date net income growing to $393 million from higher operating income Consolidated Income Statement Highlights (in millions, except EPS) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $1,833 | $1,878 | $3,646 | $3,760 | | **Gross Profit** | $477 | $446 | $943 | $863 | | **Operating Income** | $271 | $240 | $547 | $453 | | **Net Income Attributable to Ingredion** | $196 | $148 | $393 | $364 | | **Diluted EPS** | $2.99 | $2.22 | $5.99 | $5.46 | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to $7,781 million, primarily due to higher accounts receivable, while total liabilities slightly decreased and stockholders' equity grew to $4,197 million Balance Sheet Summary (in millions) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $3,517 | $3,355 | | **Total Assets** | $7,781 | $7,444 | | **Total Current Liabilities** | $1,264 | $1,281 | | **Total Liabilities** | $3,505 | $3,554 | | **Total Ingredion Stockholders' Equity** | $4,197 | $3,804 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash provided by operating activities for the six months ended June 30, 2025, decreased to $262 million due to working capital changes, with $215 million used for investing and $204 million for financing activities Cash Flow Summary - Six Months Ended June 30 (in millions) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | **Cash provided by operating activities** | $262 | $521 | | **Cash (used for) provided by investing activities** | $(215) | $125 | | **Cash used for financing activities** | $(204) | $(526) | | **(Decrease) increase in cash and cash equivalents** | $(136) | $104 | [Notes to the Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) The notes detail accounting policies, divestitures, investments, and segment performance, highlighting the South Korea business sale, a new joint venture with Agrana, and ongoing share repurchases - On February 1, 2024, the company completed the sale of its South Korea business for approximately **$294 million**, recognizing a pre-tax net gain of **$82 million**[25](index=25&type=chunk) - In June 2025, the company entered into a joint venture with Agrana Stärke GmbH, acquiring a **49%** equity interest for **$19 million** to develop starch production in Romania[26](index=26&type=chunk) - Year-to-date 2025, the company repurchased **409,000** shares of common stock for **$55 million**. As of June 30, 2025, **2.9 million** shares remained available for repurchase under the current program[47](index=47&type=chunk) Segment Net Sales to Unaffiliated Customers - YTD 2025 vs 2024 (in millions) | Segment | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | | T&HS | $1,201 | $1,185 | | F&II - LATAM | $1,169 | $1,246 | | F&II - U.S./Canada | $1,043 | $1,096 | | All Other | $233 | $233 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 and YTD 2025 financial results, noting increased net income driven by higher operating income as input costs declined faster than net sales, covering segment performance, liquidity, and cash flow activities - Year-to-date 2025 net income attributable to Ingredion increased to **$393 million** from **$364 million** in 2024, primarily due to a **21%** increase in operating income, driven by corn and input costs declining faster than net sales[81](index=81&type=chunk) - The company maintains a strong liquidity position with **$3.7 billion** available as of June 30, 2025, comprising cash, short-term investments, and borrowing capacity[117](index=117&type=chunk) - Capital investment commitments for the full year 2025 are anticipated to be between **$400 million** and **$425 million**[123](index=123&type=chunk) [Results of Operations - Second Quarter 2025](index=29&type=section&id=Results%20of%20Operations%20-%20Second%20Quarter%202025) Q2 2025 net sales decreased 2% to $1,833 million, while gross profit margin improved to 26% as cost of sales fell 5%, leading to a 32% increase in net income attributable to Ingredion, reaching $196 million Q2 2025 vs Q2 2024 Performance (in millions) | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $1,833 | $1,878 | -2% | | Cost of Sales | $1,356 | $1,432 | -5% | | Operating Income | $271 | $240 | +13% | | Net Income Attributable to Ingredion | $196 | $148 | +32% | - The effective tax rate decreased to **23.6%** in Q2 2025 from **34.8%** in Q2 2024, primarily due to the changing value of the Mexican peso and the tax impact of a 2024 impairment charge[92](index=92&type=chunk) [Segment Results - Second Quarter 2025](index=30&type=section&id=Segment%20Results%20-%20Second%20Quarter%202025) In Q2 2025, T&HS adjusted operating income increased 29%, F&II - LATAM decreased 2%, F&II - U.S./Canada fell 18%, and the All Other segment significantly reduced its operating loss Q2 2025 Adjusted Operating Income by Segment (in millions) | Segment | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Texture & Healthful Solutions | $111 | $86 | +29% | | Food & Industrial Ingredients - LATAM | $127 | $130 | -2% | | Food & Industrial Ingredients - U.S./Canada | $86 | $105 | -18% | | All Other | $(1) | $(10) | +90% | [Results of Operations - Year-to-Date 2025](index=31&type=section&id=Results%20of%20Operations%20-%20Year-to-Date%202025) For YTD 2025, net sales decreased 3% to $3,646 million, but a 7% drop in cost of sales improved gross profit margin to 26% and increasing operating income by 21% to $547 million, with net income attributable to Ingredion rising to $393 million - Excluding the impact of the South Korea business sale in 2024, net sales decreased **2%** year-over-year[102](index=102&type=chunk) - Gross profit margin increased to **26%** for YTD 2025 from **23%** in YTD 2024, as raw material and input costs decreased faster than sales[103](index=103&type=chunk) - Financing costs decreased **28%** to **$21 million** due to lower average debt balances[107](index=107&type=chunk) [Liquidity and Cash](index=32&type=section&id=Liquidity%20and%20Cash) As of June 30, 2025, Ingredion had $3.7 billion in liquidity and $1.8 billion in debt, with cash from operations decreasing to $262 million due to working capital changes and cash used for capital expenditures, financing, dividends, and share repurchases Liquidity Position as of June 30, 2025 (in billions) | Component | Amount | | :--- | :--- | | Total Available Liquidity | $3.7 | | Total Debt Outstanding | $1.8 | - Cash from operating activities decreased to **$262 million** YTD 2025 from **$521 million** YTD 2024, primarily due to a **$250 million** change in working capital from increased trade accounts receivables[122](index=122&type=chunk) - The quarterly dividend was increased to **$0.80 per share** in 2025 from **$0.78 per share** in 2024[125](index=125&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that there have been no material changes in the company's market risk exposures, including interest rates, raw material and energy costs, and foreign currencies, during the first six months of 2025 compared to the information provided in the 2024 Annual Report on Form 10-K - There have been no material changes in the information provided with respect to market risks during year-to-date 2025[137](index=137&type=chunk) [Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes in internal control over financial reporting during the quarter - The Chief Executive Officer and Chief Financial Officer concluded that as of June 30, 2025, the company's disclosure controls and procedures are effective[138](index=138&type=chunk) - There were no changes in internal control over financial reporting during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, internal controls[139](index=139&type=chunk) Part II Other Information [Legal Proceedings](index=30&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no material developments in environmental proceedings related to its Bedford Park, Illinois facility and does not anticipate material adverse effects from other ordinary course claims - There have been no material developments in the environmental proceedings related to the Bedford Park, Illinois manufacturing facility as of the date of this report[140](index=140&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=30&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No common stock shares were repurchased during Q2 2025, with 2.9 million shares remaining available under the existing repurchase program authorized through December 31, 2025 - No shares of common stock were repurchased during the second quarter of 2025[142](index=142&type=chunk) - As of June 30, 2025, **2.9 million** shares were available for repurchase under the stock repurchase program authorized until December 31, 2025[142](index=142&type=chunk) [Other Information](index=30&type=section&id=Item%205.%20Other%20Information) On May 7, 2025, CEO James P. Zallie and SVP Larry Fernandes entered into Rule 10b5-1 plans for common stock sales, commencing August 6, 2025 - CEO James P. Zallie entered into a Rule 10b5-1 plan to sell up to **195,155** shares of common stock, commencing August 6, 2025[143](index=143&type=chunk) - SVP Larry Fernandes entered into a Rule 10b5-1 plan to sell up to **13,161** shares of common stock, commencing August 6, 2025[144](index=144&type=chunk) [Exhibits](index=31&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications under Sarbanes-Oxley Sections 302 and 906, and various XBRL data files - The exhibits filed with the report include CEO and CFO certifications under Sarbanes-Oxley Sections 302 and 906, as well as XBRL data files[145](index=145&type=chunk)

Core Viewpoint - Ingredion (INGR) has experienced significant selling pressure, resulting in a 7% decline over the past four weeks, but analysts anticipate better earnings than previously expected, indicating potential for recovery [1] Group 1: Technical Analysis - The Relative Strength Index (RSI) is a key technical indicator used to identify oversold conditions, with a reading below 30 typically indicating a stock is oversold [2] - INGR's current RSI reading of 26.82 suggests that the heavy selling may be exhausting, indicating a potential bounce back towards equilibrium in supply and demand [5] Group 2: Fundamental Indicators - There is a consensus among sell-side analysts that earnings estimates for INGR have increased by 0.5% over the last 30 days, which often correlates with price appreciation in the near term [6] - INGR holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the stock's potential for a turnaround [7]

Core Viewpoint - Ingredion (INGR) has experienced a downtrend with a 7.4% decline over the past four weeks, but it is now in oversold territory, suggesting a potential turnaround as analysts expect better earnings than previously predicted [1]. Group 1: Technical Indicators - The Relative Strength Index (RSI) is a momentum oscillator that indicates whether a stock is oversold, with readings below 30 typically signaling this condition [2]. - INGR's current RSI reading is 29.13, indicating that the heavy selling pressure may be exhausting itself, which could lead to a trend reversal [5]. Group 2: Fundamental Indicators - There is a strong consensus among sell-side analysts regarding an increase in earnings estimates for INGR, with a 0.5% rise in the consensus EPS estimate over the last 30 days [7]. - An upward trend in earnings estimate revisions is generally associated with price appreciation in the near term [7]. Group 3: Analyst Ratings - INGR holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, indicating a strong potential for a turnaround [8].

Core Insights - Major U.S. stock indices experienced a decline of nearly 1% on August 5, 2025, due to weaker-than-expected services data and ongoing tariff uncertainties, particularly with Trump threatening tariffs as high as 250% on pharmaceuticals [1][10] - Despite market volatility, low-leverage stocks are highlighted as safer investment options during economic uncertainty, with specific companies recommended for their strong earnings growth and low debt levels [2][10] Market Overview - The U.S. stock market is currently facing challenges due to tariff-related uncertainties and weaker economic data, leading to a lack of confidence among investors [2][10] - The recent wave of corporate earnings that exceeded estimates has been overshadowed by tariff concerns, impacting overall market optimism [1] Investment Strategy - Investors are advised to consider low-leverage stocks as a protective measure against potential economic downturns, with a focus on companies that exhibit solid earnings growth and lower debt-to-equity ratios [6][9] - The debt-to-equity ratio is emphasized as a critical metric for assessing financial risk, with lower ratios indicating better solvency [7][9] Recommended Low-Leverage Stocks - **NatWest Group (NWG)**: Collaborating with Google Cloud to enhance growth, with a projected 20.1% sales improvement for 2025 and a long-term earnings growth rate of 10.9% [15][16] - **Zions Bancorporation (ZION)**: Reported a 9% year-over-year increase in net interest income, with a 5% expected earnings growth for 2025 [17][18] - **Luxfer Holdings (LXFR)**: Achieved a 5.8% increase in adjusted net sales and a 25% rise in adjusted earnings per share, with a long-term earnings growth rate of 8% [19][20] - **Kingstone Companies (KINS)**: Declared a quarterly cash dividend, indicating strong financial health, with a projected 37.9% improvement in both sales and earnings for 2025 [21][22] - **Ingredion Inc. (INGR)**: Reported a 1% increase in adjusted operating income, with a long-term earnings growth rate of 11% and a 1% sales improvement expected for 2025 [23][24]

Core Viewpoint - Ingredion (INGR) has experienced significant selling pressure, declining 7.6% over the past four weeks, but is now positioned for a potential trend reversal as it is in oversold territory, with analysts expecting better earnings than previously predicted [1] Group 1: Technical Indicators - The Relative Strength Index (RSI) is a momentum oscillator that measures the speed and change of price movements, with a reading below 30 indicating that a stock is considered oversold [2] - INGR's RSI reading is currently at 24.93, suggesting that the heavy selling may be exhausting itself and a trend reversal could occur soon [5] Group 2: Fundamental Indicators - There is a strong consensus among sell-side analysts that earnings estimates for INGR have increased by 0.5% over the last 30 days, indicating a potential for price appreciation in the near term [7] - INGR holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the stock's potential turnaround [8]

Core Viewpoint - Ingredion (INGR) has faced significant selling pressure, resulting in an 8% decline over the past four weeks, but analysts anticipate better earnings than previously expected, indicating a potential turnaround for the stock [1]. Group 1: Technical Indicators - The Relative Strength Index (RSI) is utilized to determine if a stock is oversold, with readings below 30 indicating oversold conditions [2]. - INGR's current RSI reading is 23.91, suggesting that the heavy selling may be exhausting itself and a trend reversal could be imminent [5]. - The RSI helps investors identify potential entry points for stocks that have fallen below their fair value due to excessive selling pressure [3]. Group 2: Fundamental Indicators - There has been a consensus among sell-side analysts to raise earnings estimates for INGR, resulting in a 0.6% increase in the consensus EPS estimate over the last 30 days [7]. - An upward trend in earnings estimate revisions typically correlates with price appreciation in the near term [7]. - INGR holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate trends and EPS surprises, further supporting the potential for a turnaround [8].

Core Insights - Ingredion Incorporated reported a solid performance for Q2 2025, demonstrating the strength and resilience of its diversified business model, with a 2% increase in net sales and a 29% increase in operating income in the Texture & Healthful Solutions segment [1][12][9] Financial Performance - The reported diluted EPS for Q2 2025 was $2.99, compared to $2.22 in Q2 2024, reflecting a 35% increase [2][30] - Adjusted diluted EPS remained stable at $2.87 for both Q2 2025 and Q2 2024 [2][3] - Total net sales for Q2 2025 were $1.833 billion, down 2% from $1.878 billion in Q2 2024 [5][29] - Operating income for Q2 2025 was $271 million, a 13% increase from $240 million in Q2 2024 [9][30] Segment Performance - The Texture & Healthful Solutions segment achieved net sales of $599 million in Q2 2025, a 2% increase from $588 million in Q2 2024, with operating income rising 29% to $111 million [11][12] - The Food & Industrial Ingredients segment in Latin America reported net sales of $596 million, down 5% from $630 million in Q2 2024, with operating income decreasing 2% to $127 million [13][14] - The U.S./Canada Food & Industrial Ingredients segment saw net sales decline by 6% to $523 million, with operating income falling 18% to $86 million due to a mechanical fire affecting production [15][16] Outlook - The company raised its full-year EPS guidance to a range of $11.25 to $11.75, with adjusted EPS expectations between $11.10 and $11.60 [20][21] - Full-year net sales are expected to remain flat compared to the previous year, with growth in the Texture & Healthful Solutions segment offset by declines in pricing due to lower raw material costs [20][21] - The company anticipates mid-single-digit growth in both reported and adjusted operating income for the full year [21]

Group 1 - The conference call is for Ingredion's Second Quarter 2025 Earnings, featuring key executives including the CEO and CFO [2][3] - The press release and presentation related to the earnings results are available on Ingredion's website [4] - Forward-looking statements are included in the presentation, which are subject to various risks and uncertainties [5]

Financial Data and Key Metrics Changes - For Q2 2025, the company reported adjusted operating income of $273 million, marking the highest Q2 in company history, while net sales declined by 2% primarily due to lower corn costs [6][19] - Gross profit dollars increased by 7%, with gross margin rising by 230 basis points to 26% [19] - Adjusted operating income increased by 1% for the quarter and 12% year-to-date [6][19] Business Line Data and Key Metrics Changes - The Texture and Healthful Solutions segment saw a 2% increase in net sales and a remarkable 29% rise in operating income, driven by a 3% increase in net sales volume [6][21] - Food and Industrial Ingredients LATAM experienced a 5% decline in net sales, impacted by reduced brewing volumes and macroeconomic challenges [20][22] - Food and Industrial Ingredients U.S./Canada reported a 6% decline in net sales, significantly affected by a mechanical fire at the Chicago plant [19][23] Market Data and Key Metrics Changes - The U.S. and Canada markets showed a 3% increase in sales volume for Texture and Healthful Solutions, with beverages, bakery, and dairy categories performing strongly [9][12] - LATAM's Food and Industrial Ingredients segment faced a 4% decline in sales volume due to macroeconomic impacts, particularly in Brazil and Mexico [10][22] - The company noted a positive trend in clean label solutions, with double-digit growth in the U.S. [11][12] Company Strategy and Development Direction - The company is focusing on business growth through its Texture and Healthful Solutions segment, which is expected to continue strong performance due to customer engagement and innovation [14][33] - Cost competitiveness is being pursued through operational excellence, with expectations to exceed $50 million in savings for the cost to compete program [15][30] - The company is committed to sustainability, as evidenced by its recent recognition as a net zero leader by Forbes [18] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the second half of 2025, acknowledging macroeconomic headwinds but highlighting strong underlying volume in the U.S./Canada business [40][42] - The company anticipates flat to slightly up net sales for the full year 2025, with adjusted operating income expected to rise in the mid-single digits [29][30] - Management emphasized the importance of navigating uncertainties related to tariffs and macroeconomic conditions in LATAM [60][62] Other Important Information - The company has repurchased $55 million of its outstanding shares and paid out $106 million in dividends [28] - Capital expenditures for the year are projected to be between $400 million to $425 million, reflecting ongoing investments in growth initiatives [30] Q&A Session Summary Question: Is the guidance still conservative given the strong performance? - Management acknowledged the cautious approach due to uncertainties around tariffs and customer demand shifts, but noted strong underlying volume in the U.S./Canada business [38][40] Question: What is driving the operating leverage in Texture and Healthful Solutions? - The increase in operating income was attributed to improved operational execution, higher utilization rates, and favorable raw material costs [44][46] Question: What is the outlook for Food and Industrial Ingredients LATAM? - Management indicated that while macroeconomic conditions are challenging, they expect to see improvements in the second half as seasonal demand increases [60][62] Question: What is the impact of recent news on cane sugar versus high fructose corn syrup? - Management does not anticipate a significant impact on HFCS demand, as recent product announcements are seen as complementary rather than cannibalistic [68][70] Question: What is the status of the potential sale of the Pakistan asset? - The company is in discussions with three interested parties for acquiring a majority stake in the Raiffon Mays business [72] Question: What are the expectations for operating margins in the second half? - Management expects operating margins to remain in the high teens, with potential for slight fluctuations based on sourcing costs and tariff impacts [76][82]