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1. Company Snapshot

1.a. Company Description

MGP Ingredients, Inc., together with its subsidiaries, produces and supplies distilled spirits, branded spirits, and food ingredients.It operates through three segments: Distillery Products; Branded Spirits; and Ingredient Solutions.The Distillery Products segment provides food grade alcohol for beverage applications that include bourbon and rye whiskeys, as well as grain neutral spirits, including vodka and gin; and food-grade industrial alcohol, which is used as an ingredient in foods, personal care products, cleaning solutions, pharmaceuticals, and various other products.


This segment also provides fuel-grade alcohol for blending with gasoline; distillers feed and related co-products, such as distillers feed and corn oil; and warehouse services, including barrel put away, storage, and retrieval services, as well as blending services.The Branded Spirits segment provides ultra-premium, premium, mid, and value branded distilled spirits.The Ingredient Solutions segment provides specialty wheat starches for food applications under the Fibersym, Resistant Starch, and FiberRite RW Resistant Starch names; specialty wheat proteins for food applications under the Arise and Proterra names; gluten-free textured pea proteins; commodity wheat starch for food and non-food applications; and commodity wheat proteins.


The company sells its products directly or through distributors to manufacturers and processors of finished packaged goods or to bakeries primarily in the United States, the United Kingdom, Japan, Thailand, Mexico, and Canada.MGP Ingredients, Inc.was founded in 1941 and is headquartered in Atchison, Kansas.

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1.b. Last Insights on MGPI

MGP Ingredients' recent performance has been negatively impacted by a series of events. The company's CEO resignation in 2023 has led to a decline in investor confidence. Additionally, the closure of a notable facility has resulted in significant costs and disruptions to operations. Furthermore, the shift to higher-margin business has been slower than expected, contributing to the decline. The industry-wide decline in brown-goods business has also had a negative impact on the company's revenue.

1.c. Company Highlights

2. MGP Ingredients' Q3 2025 Earnings: A Mixed Bag

MGP Ingredients reported a decline in consolidated sales of 19% to $131 million in the third quarter, with the Branded Spirits segment decreasing 3% and the Distilling Solutions segment declining 43%. However, the Ingredient Solutions segment sales increased 9%. Adjusted EBITDA decreased 29% to $32 million, and adjusted basic earnings per share reached $0.85, beating estimates of $0.62. The company's gross profit declined 36% due to equipment outages and operational reliability issues in the Ingredient Solutions segment. Despite the challenges, the company raised its full-year 2025 adjusted EBITDA and adjusted earnings per share guidance to $110 million to $115 million and $2.60 to $2.75, respectively.

Publication Date: Nov -24

📋 Highlights
  • Q3 Sales Decline: Consolidated sales fell 19% to $131M, driven by a 43% drop in Distilling Solutions segment sales to $56.4M.
  • Guidance Raised: Full-year adjusted EBITDA guidance increased to $110M–$115M (from prior $105M–$110M), with EPS guidance at $2.60–$2.75.
  • Leadership Changes: Appointed Matias Bentel as CMO and Chris Wiseman as SVP of Operations to accelerate branded growth and operational efficiency.
  • Biofuel Offset Strategy: Biofuel production expected to offset disposal costs in Ingredient Solutions segment, which faced a 36% gross profit decline due to equipment outages.
  • Inventory & Pricing Trends: Industry-wide inventory levels remain full, but pricing stays stable, with no significant discounting despite shifting to just-in-time customer buying behaviors.

Segment Performance

The Distilling Solutions segment saw strong gross margins due to a larger volume of aged sales and effective cost management. The company is reevaluating its Branded Spirits portfolio, focusing on premium plus performance, and exploring opportunities in the mid-to-value segment. The Ingredient Solutions segment is working to improve operational reliability, with expectations to return to historical high levels of performance in the first part of next year. As Julie Francis, CEO, noted, "We're seeing success with our ProTerra line in extrusion and have started shipping biofuel, which will help offset disposal costs."

Industry Trends and Outlook

The company is seeing a trend towards aged whiskey, with nearly 1,000 customers who have bought whiskey over the years. The inventory levels in the industry are full, but pricing remains rational, with no significant discounting or pricing actions. The company expects headwinds in the first half of 2026 but is confident in its ability to navigate the industry cycles and deliver sustained growth. Analysts estimate next year's revenue growth at -2.8%.

Valuation and Financial Health

The company's current P/E Ratio is -32.22, indicating potential overvaluation. The EV/EBITDA ratio is 29.92, suggesting a relatively high valuation. However, the company's net debt leverage is manageable, with total debt of $269 million. The company prioritizes strong cash generation, manages working capital, and supports ongoing operations, long-term growth investments, and future capital structure considerations. The Dividend Yield is 2.1%, and the Free Cash Flow Yield is 12.16%, indicating a relatively attractive return for investors.

3. NewsRoom

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MGP Ingredients (NASDAQ:MGPI) versus Anheuser-Busch InBev SA/NV (NYSE:BUD) Financial Survey

Nov -19

Source: defenseworld.net

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Campbell & CO Investment Adviser LLC Sells 22,495 Shares of MGP Ingredients, Inc. $MGPI

Nov -18

Source: defenseworld.net

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MGP Ingredients, Inc. (NASDAQ:MGPI) Receives $40.00 Average Price Target from Analysts

Nov -17

Source: defenseworld.net

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MGP Ingredients Is Cheap For A Reason

Nov -13

Source: seekingalpha.com

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MGP Ingredients: A Distiller's Patience In An Age Of Excess Supply

Nov -06

Source: seekingalpha.com

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MGP Ingredients: A Quiet Turnaround Brewing Under Captain Francis

Nov -04

Source: seekingalpha.com

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MGP Ingredients, Inc. (MGPI) Q3 2025 Earnings Call Transcript

Oct -29

Source: seekingalpha.com

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Compared to Estimates, MGP (MGPI) Q3 Earnings: A Look at Key Metrics

Oct -29

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.94%)

6. Segments

Distilling Solutions

Expected Growth: 1.8%

MGP Ingredients' Distilling Solutions segment growth of 1.8% is driven by increasing demand for premium American whiskey, expansion of craft distilleries, and rising sales of specialty bourbons and whiskeys. Additionally, the company's strategic partnerships, capacity expansions, and innovative product offerings contribute to its growth momentum.

Branded Spirits

Expected Growth: 2.2%

MGP Ingredients' Branded Spirits segment growth of 2.2% is driven by increasing demand for premium whiskey, expansion of distribution channels, and strategic partnerships. Additionally, the company's focus on innovation, quality, and customer relationships contributes to its growth. Furthermore, the rising popularity of craft spirits and the growing trend of at-home cocktail consumption also support the segment's growth.

Ingredient Solutions

Expected Growth: 1.9%

MGP Ingredients' Ingredient Solutions segment growth of 1.9% is driven by increasing demand for premium beverages, expansion in the craft spirits market, and growing consumer preference for natural and organic ingredients. Additionally, the company's strategic investments in innovation and capacity expansion have enabled it to capitalize on emerging trends in the food and beverage industry.

7. Detailed Products

Distilled Spirits

MGP Ingredients, Inc. produces a range of distilled spirits, including bourbon, whiskey, and vodka, which are used in various applications such as beverages, flavorings, and pharmaceuticals.

Specialty Wheat Proteins

MGP's specialty wheat proteins are used in various applications such as baked goods, snacks, and meat products, providing texture, structure, and nutritional benefits.

Plant-Based Proteins

MGP's plant-based proteins are derived from sources such as pea, rice, and potato, and are used in various applications such as meat alternatives, snacks, and beverages.

Textured Proteins

MGP's textured proteins are used in various applications such as meat alternatives, snacks, and cereals, providing texture and nutritional benefits.

Industrial Alcohol

MGP's industrial alcohol is used in various applications such as cleaning products, personal care products, and pharmaceuticals.

8. MGP Ingredients, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for MGP Ingredients, Inc. is medium due to the availability of alternative products in the market. While the company's products are unique, customers may still opt for substitutes, affecting the company's sales.

Bargaining Power Of Customers

The bargaining power of customers is low for MGP Ingredients, Inc. due to the company's strong brand presence and customer loyalty. Customers have limited bargaining power, and the company has a strong negotiating position.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium for MGP Ingredients, Inc. due to the availability of alternative suppliers in the market. While the company has some negotiating power, suppliers also have some bargaining power, affecting the company's costs.

Threat Of New Entrants

The threat of new entrants is low for MGP Ingredients, Inc. due to the high barriers to entry in the industry. New entrants would require significant investment and expertise to compete with the company.

Intensity Of Rivalry

The intensity of rivalry is high for MGP Ingredients, Inc. due to the competitive nature of the industry. The company faces intense competition from established players, and the market is highly competitive.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 26.20%
Debt Cost 3.95%
Equity Weight 73.80%
Equity Cost 7.72%
WACC 6.73%
Leverage 35.49%

11. Quality Control: MGP Ingredients, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Ingles Markets

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MGP Ingredients

A-Score: 3.8/10

Value: 6.9

Growth: 5.0

Quality: 3.2

Yield: 2.0

Momentum: 0.0

Volatility: 5.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

26.42$

Current Price

26.42$

Potential

-0.00%

Expected Cash-Flows