Inghams Group (ASX: ING) shares are in focus after starting the week strong.
Inghams is a leading vertically integrated poultry producer (from stock feed to end products) with a market leading position in Australia and the number two participant in New Zealand.
It supplies poultry products, notably to major Australian supermarkets Woolworths and Coles, and quick-service restaurants including McDonalds and KFC.
Image source: Getty Images
Share price snapshot
Inghams shares were in a free fall up until last week.
From the start of January until close of trade last Friday, the poultry producer's shares had fallen 32%.
However on Monday, Inghams shares jumped almost 7%, followed by a further 8% rise yesterday.
Investors reacted positively to an update from the company that included:
- Reaffirmed FY26 guidance for Underlying EBITDA (pre AASB 16) of $180 million to $200 million
- For the first nine months of FY26, group core poultry volumes rose 1.1% versus prior comparable period (PCP)
- Group core poultry net selling prices increased 1.1% versus PCP
- Annualised cost savings initiatives expected to deliver $60–80 million
- Revised capital expenditure guidance of approximately $80 million for FY26.
Chief Executive Officer and Managing Director said Ed Alexander said:
We are seeing improved operational performance and positive momentum from initiatives already delivered, while reaffirming our FY26 guidance in a challenging environment.
What is Bell Potter's view?
Following this impressive 15% rise, investors may be wondering if the tide has officially turned after a rough few months.
The team at Bell Potter have subsequently raised their EBITDAL (Earnings Before Interest, Taxes, Depreciation, and Amortisation and Leases) forecasts by +4% in FY26e, +6% in FY27e and +9% in FY28e.
Upgrades are reflective of higher baseline EBITDAL in the Australian business through 3Q26e and incorporation of targeted initiatives in FY27-28e. Our target price is now $2.10ps (prev. $2.00ps).
Modest upside for Inghams shares
Based on this updated price target of $2.10, this indicates an upside potential of just over 7% from current levels.
The underlying 3Q26 exit rate in Australia looked strong, and for the most part this mitigates the estimated 4Q26 impact of rising fuel costs. Looking into FY27e, cost out initiatives are likely to blunt some of the impact of inflationary costs pressures in area such as labour, fuel, packing and feed, with the key area of risk being any material rotation in channel to market or supply growth.
