What Happened?
Shares of food and beverage supplier MGP Ingredients (NASDAQ: MGPI) jumped 8.5% in the afternoon session after the company reported third-quarter results that surpassed Wall Street's expectations for both earnings and revenue, and raised its full-year profit forecast.
Adjusted earnings per share came in at $0.85, which was well ahead of analyst estimates of $0.60. Revenue for the quarter was $130.9 million, also beating consensus forecasts of $128.2 million. However, the results showed a decline from the same period in the previous year, with consolidated sales decreasing by 18.9% and adjusted earnings per share falling from $1.29. Despite these year-over-year drops, investors focused on the better-than-expected performance and the company's improved financial outlook. MGP Ingredients updated its full-year guidance, increasing its forecast for adjusted earnings per share to a midpoint of $2.68, signaling confidence in its future profitability.
Is now the time to buy MGP Ingredients? Access our full analysis report here.
What Is The Market Telling Us
MGP Ingredients’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock gained 3.2% on the news that the release of a favorable Consumer Price Index (CPI) report showed inflation cooling more than anticipated. The July report from the Bureau of Labor Statistics indicated a year-over-year inflation rate of 2.7%, just below the 2.8% economists had forecast. This suggests that price pressures on consumers may be easing. Particularly beneficial for the sector was the news that the food index remained flat, with grocery prices even declining by 0.1% month-over-month. This development is seen as a positive for the profitability of food, beverage, and personal care companies, as lower input costs and increased consumer purchasing power could boost sales. A Federal Reserve official's comments on the same day, noting that consumer spending fundamentals remain solid, further bolstered investor confidence in the sector's resilience.
MGP Ingredients is down 36.1% since the beginning of the year, and at $25.02 per share, it is trading 55.8% below its 52-week high of $56.65 from October 2024. Investors who bought $1,000 worth of MGP Ingredients’s shares 5 years ago would now be looking at an investment worth $582.43.
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