Poultry giant ING has still got a market cap of $1.1bn even after a period of significant underperformance from the stock both before and post-COVID. The company recently delivered its FY’23 half-year result which showed NPAT was down 13.1% over the year primarily due to operational challenges such as supply chain disruptions and broad inflationary pressures. However, the company is now saying things are improving and it’s starting to enjoy a healthy growth in poultry demand as a cheaper alternative to the likes of beef.
While the stock is not ‘screaming value’, trading on a 1 year forward P/E of 14.8x versus its 5-year average of 13.7x, it’s in a turnaround phase and higher earnings in FY24 &25 will push it into cheaper territory, while its forecast to yield more than 3% over the next 12 months.
- We like ING’s defensive qualities because if we see a deep recession it will drive an even larger migration towards poultry as the consumer’s choice for protein.
This is certainly a business that appears to have reached its nadir making it potentially attractive to suitors.
MM likes ING for around $3
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