Inghams Group Limited Just Missed EPS By 40%: Here's What Analysts Think Will Happen Next

Shareholders might have noticed that Inghams Group Limited (ASX:ING) filed its yearly result this time last week. The early response was not positive, with shares down 5.9% to AU$2.07 in the past week. It looks like a pretty bad result, all things considered. Although revenues of AU$3.2b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 40% to hit AU$0.093 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

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After the latest results, the nine analysts covering Inghams Group are now predicting revenues of AU$3.32b in 2027. If met, this would reflect an okay 2.9% improvement in revenue compared to the last 12 months. Per-share earnings are expected to shoot up 82% to AU$0.17. In the lead-up to this report, the analysts had been modelling revenues of AU$3.29b and earnings per share (EPS) of AU$0.21 in 2027. So there's definitely been a decline in sentiment after the latest results, noting the real cut to new EPS forecasts.

Check out our latest analysis for Inghams Group

The average price target fell 5.3% to AU$2.26, with reduced earnings forecasts clearly tied to a lower valuation estimate. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Inghams Group analyst has a price target of AU$3.50 per share, while the most pessimistic values it at AU$1.90. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Inghams Group's revenue growth is expected to slow, with the forecast 2.9% annualised growth rate until the end of 2027 being well below the historical 4.2% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 10% annually. Factoring in the forecast slowdown in growth, it seems obvious that Inghams Group is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Inghams Group's revenue is expected to perform worse than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Inghams Group's future valuation.

With that in mind, we wouldn't be too quick to come to a conclusion on Inghams Group. Long-term earnings power is much more important than next year's profits. We have forecasts for Inghams Group going out to 2029, and you can see them free on our platform here.

Even so, be aware that Inghams Group is showing 3 warning signs in our investment analysis , and 1 of those shouldn't be ignored...