Inghams Group Ltd (ASX: ING), one of Australia’s largest poultry producers, has experienced a significant decline in its share price, dropping over 36% since May 2025. This downturn follows a challenging operating environment and disappointing profitability results. Despite these difficulties, analysts suggest this may be an opportune moment for investors to consider the company’s shares.
The company has secured supply agreements with major retailers, wholesalers, and quick service restaurants. Inghams also produces turkey, stockfeed, and value-added poultry products to meet evolving consumer preferences. The recent decline in share value has created a scenario where the business might offer an attractive dividend yield for potential investors.
Projected Earnings and Dividends
Looking ahead, Inghams is expected to face a tough first half in fiscal year 2026, but analysts anticipate a turnaround thereafter. According to projections from CMC Markets, Inghams could generate earnings per share (EPS) of 19.7 cents in FY26, with an annual dividend payout of 13.5 cents per share. This would equate to a grossed-up dividend yield of 7.75%, assuming the inclusion of franking credits.
The outlook for FY27 appears even more promising. Analysts predict a rise in EPS to 25.8 cents and an increase in the dividend payout to 17.3 cents per share. Should these projections materialize, investors could see a grossed-up dividend yield approaching 10%, making it an enticing option for dividend investors.
Positive Indicators for Recovery
In a recent update during their annual general meeting, Inghams provided a positive outlook despite the current low trading price. The company expects to achieve an underlying operating profit (EBITDA) of $80 million in the first half of FY26. For the entire fiscal year, Inghams anticipates an underlying operating profit between $215 million and $230 million. This guidance is heavily weighted toward the second half, as the company aims to recover from weak trading conditions experienced in the fourth quarter of FY25.
Inghams has indicated an improved revenue outlook, with core poultry volumes slightly surpassing those of FY25, despite a modest drop in net selling price (NSP). The company also expects wholesale profit margins to remain favourable. While operating costs are rising due to inflation and operational challenges, these pressures are being offset by annualized savings of between $60 million and $80 million from various initiatives in labour, procurement, and site operations. Additionally, feed costs are expected to provide a modest benefit moving forward.
At its current share price, Inghams is valued at under 10 times the estimated earnings for FY27, indicating that the stock could be undervalued in the current market.
Before making any investment decisions regarding Inghams Group Limited, potential investors are encouraged to conduct thorough research. Notably, financial expert Scott Phillips from Motley Fool has identified five other stocks that he believes may be better investment opportunities at this time. The insights from Motley Fool’s Share Advisor service, which has successfully guided members to select stocks that have significantly increased in value, may provide useful context for those considering an investment in Inghams.
In summary, while Inghams Group’s stock has faced considerable challenges leading to a notable decline, the projected earnings rebound and compelling dividend yield could make it an attractive option for investors looking for opportunities in the ASX.
