Inghams Ltd (ASX: ING) shares hit a 12-month low this week, a share price performance which chair Helen Nash admitted in her address to the company's annual general meeting on Thursday was "deeply disappointing".
But is it time to buy the dip, or will a suitor come in to take the company out?
Poor report card
Inghams, which published a trading update on Wednesday, said while market fundamentals had been strong, "at the same time, we have experienced higher than expected operational costs in Australia across farming and processing operations which arose toward the end of FY25''.
Ms Nash said in her address to the AGM on Thursday that the 33% or so decrease in the company's share price and the softer trading update had come about amid "challenging market conditions" that emerged in the fourth quarter of the last financial year, "and specific operational cost pressures across inventory management, farming and processing performance, and our turkey operations''.
She went on to say:
I acknowledge that these issues, and the performance of our share price, are deeply disappointing for all shareholders, and I want to assure you that your Board and management are responding with urgency and discipline through a range of measures which are expected to position the Company for stronger performance in the second half of FY26 and beyond.
But where there is share price weakness, there can be an opportunity.
The Australian Shareholders Association, in a report published ahead of the AGM, raised the notion that it could lead takeover suitors to take a closer look at the company.
As they said in their report:
So, what is going to happen? 2026 is not looking good with EBITDA predicted to be at best 2.8% lower and at worst, down by 10%. Is there a future upside? Hopefully! In the short term (first half 2026): reducing excess inventory built up in FY25 and rightsizing production, which is expected to weigh on first half 2026 earnings. Inghams has a substantial number of issues to overcome and hopefully it will, however its plunging share price and market positioning may make is susceptible to being bought out.
Shares looking cheap
Broker Jarden has also run the ruler over the company's recent trading update, and said while the update was "mixed", there was money to be made buying Inghams shares at current levels.
As they said in a note to clients:
We retain our neutral rating but with a positive bias, owing to new management taking action to cut cost, drive volumes and reduce volatility in earnings. Confidence around guidance, operational improvement and industry pricing will be key to becoming more positive.
Jarden has a price target of $2.80 on Inghams shares, and factoring in dividends, is projecting a total shareholder return of 19.3% based on the closing price on Wednesday of $2.43. Inghams shares were 3.1% higher on Thursday at $2.50.
