The Inghams Group Ltd (ASX: ING) share price has been a positive performer again on Monday.
In afternoon trade, the poultry producer's shares are up 3.5% to $3.53.
This means the Inghams share price is now up 12% over the last two trading sessions.
Image source: Getty Images
Why is the Inghams share price charging higher?
Investors have been bidding the Inghams share price higher since the release of its FY 2021 guidance on Friday.
For the 12 months ending 25 June, Inghams is forecasting statutory earnings before interest, tax, depreciation and amortisation (EBITDA) of $438 million to $448 million and statutory net profit after tax of $80 million to $87 million. This has been driven by the benefits derived from operational efficiencies implemented throughout the year and improved trading conditions.
Management also noted that the guidance was well-ahead of the analyst consensus estimates.
Can its shares keep on climbing?
One leading broker believes the Inghams share price still has a long way to run from here.
According to a note out of Goldman Sachs, its analysts have retained their buy rating and lifted their price target on the company's shares to $4.50.
Based on its current share price, this implies potential upside of 27% over the next 12 months excluding dividends. And if you include dividends, this potential return stretches to ~34%.
What did Goldman say?
Goldman commented: "The ANZ Poultry market is improving and ING has issued a positive trading update as we head to a close in FY21. We have upgraded our FY21-FY23 EBITDA by +2-5% and EPS by +2-11%. While today's announcement is specific to FY21 profitability, we expect some flow through to future years from the high earnings base. Our 12-month TP has increased +5% to A$4.50, implying 39% [prior to today] total return potential. We retain our Buy rating."
