Analyst Note
| Seth Goldstein, CFA |Ingredion reported solid first-quarter results. Adjusted operating income was up 6% versus the prior-year quarter as the increased prices and higher volumes were partially offset by cost inflation. The results were in line with our expectations for the year as we expect Ingredion's pricing power in its specialty ingredients, which make up one third of sales, will allow the company to pass along higher costs. For the remaining core ingredients, the company either sells products on a cost-plus model or hedges its main raw materials as a way to effectively lock in a profit. With our outlook intact, we maintain our $120 per share fair value estimate for Ingredion. Our narrow-moat rating is also unchanged.