Inghams Earnings: Poultry Price Increases Lift Profitability

We raise our fair value estimate for shares in Inghams by 6% to AUD 3.70 following the release of fiscal 2023 results. Underlying EBITDA lifted 14% on fiscal 2022 to AUD 434 million—about 2% above our forecast. Higher input costs have weighed on Inghams' recent history. Feed prices remain elevated, albeit moderating from recent record highs, and fuel, freight, and ingredients have all increased ahead of general inflation. But commensurate price increases—which are notoriously slow to respond—are beginning to flow through after sharply lower margins in fiscal 2022. Inghams enjoyed higher prices across all channels, with core poultry net selling prices up about 13% in fiscal 2023. But poultry is a highly commoditised product, and Inghams remains a price taker, leading to our no-moat rating.