We Expect Demand for Inghams' Poultry to Remain Robust Despite Near-Term Oversupply

We anticipate Inghams will face near-term earnings pressure amid elevated feed costs, which we expect the firm is unable to pass through in its entirety, and oversupply issues in New Zealand. Beyond near-term struggles, we forecast Inghams returning to earnings growth, with top line driven by population growth and some per-capita increases in chicken consumption, aided by process enhancements and further improvements in the feed conversion ratio for chicken. However, Inghams' customer base is highly concentrated, and its products highly commoditised, and we do not believe the company has carved an economic moat required to sustainably derive economic profits.