Inghams Group Limited (ASX:ING)
Hi James, What is happening with ING? The last month has seen it tumble further from your bullish comments in February. Surely chickens are on almost everyone’s list of must eat foods? Rob
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Answer
Hi Rob,
Chicken consumption has indeed trended steadily higher over the past decade, helped by its relative affordability and the growing perception as a healthier alternative to red meat. Demand has been particularly strong across quick-service restaurants and ready-to-eat meals, while rising cost-of-living pressures have also supported the shift toward lower-cost protein options.
However, the story at Inghams hasn’t been so rosy in 2026. In February they downgraded FY26 earnings, discussed Here, which at the time, around $2, we thought it was “looking interesting.” The stocks continued to soften over the last few months as the picture clouds.
The Iran war has materially worsened ING’s cost outlook at precisely the worst possible time with the Strait of Hormuz disruption sending fertiliser prices sharply higher, driving a significant increase in feed costs across corn, wheat and soybeans, inputs that account for roughly 60–65% of Inghams’ production base. With Russia suspending ammonium nitrate exports and China restricting phosphate supply, ING is facing one of the toughest feed cost environments in years, adding further pressure to margins already squeezed by supermarket pricing power.
- It’s hard to imagine things getting any worse for Inghams.
ING could be called a “fallen defensive”, a business in a structurally growing sector that has managed to destroy shareholder value through significant margin compression. The ~30% discount to its 5-year average valuation and ~6% franked yield are compelling at a glance, but the market is unlikely to re-rate it until August results show genuine margin stabilisation.
- ING is potentially a great turnaround story under $1.80, but we’d want to see their next set of numbers before having more conviction in that call.
