10 Best Beverage Stocks to Buy According to Analysts

1. MGP Ingredients, Inc. (NASDAQ:MGPI)

Average Share Price Upside Potential as of February 20: 119.20%

MGP Ingredients, Inc. (NASDAQ:MGPI) is a leading producer and supplier of distilled spirits, branded spirits, and food solutions. The company’s offerings include bourbon, gins, vodkas, and rye whiskeys. It is the best beverage stock to buy according to analysts.

MGP Ingredients, Inc. (NASDAQ:MGPI) announced mixed results for the third quarter of fiscal 2024. It reported a 24% year-over-year decline in consolidated sales, driven by lower sales across all operating segments. Distilling Solutions sales were down by 36%, while the Branded Spirits segment’s sales dropped 6% from last year. The Ingredient Solutions segment recorded an 18% dip in sales.

After a decade of robust demand, with a boom during the pandemic, the American whiskey market is transitioning from a supercycle toward a downturn, with declining prices, lower demand, and reduced visibility. The company expects the challenging environment to persist, and continue through 2025.

Despite ongoing headwinds, MGP Ingredients, Inc. (NASDAQ:MGPI) reported an 82% increase in net income for the quarter compared to last year. Adjusted EPS was logged at $1.29, which was down from $1.36 per share last year, but beat analysts’ estimates by two cents. It ended the quarter with $20.8 million in cash.

MGP Ingredients, Inc. (NASDAQ:MGPI) has highlighted a strategic action plan to stabilize the business amid softening trends in the market. The company will optimize its cost structure, reduce whiskey production and aging whiskey put-aways, and focus on international expansion to leverage the strong growth potential outside the U.S.

Overall, MGP Ingredients, Inc. (NASDAQ:MGPI) ranks first among the 10 Best Beverage Stocks to Buy According to Analysts. While we acknowledge the potential of beverage companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than MGPI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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