Inghams Group Ltd (ASX: ING) shares have opened this morning gaining more than 2%.
However, in 2025, this consumer staples stock is down approximately 22%.
The company supplies poultry products, notably to major Australian supermarkets Woolworths Group Ltd (ASX: WOW) and Coles Group Ltd (ASX: COL), as well as quick-service restaurants such as McDonald's and KFC. Its sales include chicken and turkey products, as well as supplying the Australian stock feed and New Zealand dairy feed industries.
Inghams recently released its FY26 trading update, which showed some improvement in the supply-demand environment.
According to a new report, the team at Macquarie remains neutral on Inghams shares and has downgraded its target price.
Here's the latest guidance out of the broker.
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Supply/demand improving
The team at Macquarie said the supply-demand environment is improving for now.
The broker said Inghams has pulled back on volumes since the end of FY25, and the wholesale market pricing has improved sequentially, with a ~39% increase in wholesale margins vs FY25.
Macquarie also noted there are green shoots in the QSR channel, with volumes +8.6% in the 18 weeks of FY26 vs pcp, driven by improved demand supported by promotional activity from market participants.
QSR channel refers to Quick Service Restaurants – basically fast-food chains (e.g., McDonald's, KFC, etc.).
We await evidence of execution on cost control, and a stabilising supply environment, to become more positive.
Risk in 1H26 guidance
On the negative side, Macquarie is cautious about Inghams Group meeting its full-year FY26 earnings guidance.
The company guided for FY26 pre-AASB16 EBITDA of around $223 million. However, only $80 million is expected in 1H26.
That suggests a 36%/64% earnings split between 1H and 2H. Essentially, the second half would need to be a record result.
Historically, Inghams' second-half contribution has been below 50%, and only once (FY23) reached 55%.
Because of this, Macquarie thinks the 2H target is ambitious and forecasts FY26 EBITDA of about $207 million, which is 4% below guidance.
A further risk is that a competitor's new processing plant (starting April 2026) could increase supply and pressure prices in the final quarter of FY26.
Price target downgrade for Inghams shares
Based on this guidance, the team at Macquarie has a neutral rating on Inghams shares.
The 12-month price target has also been reduced to $2.30 (previously $2.70).
Based on today's opening stock price of $2.50, the target price from Macquarie indicates a downside of 8%.
