Top broker tips huge returns from the Inghams (ASX:ING) share price

The Inghams Group Ltd (ASX:ING) share price is on form and has been tipped to climb materially higher from here by a leading broker…

| More on:
blue arrows representing a rising share price

Image source: Getty Images

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.

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.”

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of May 24th 2021

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Broker Notes