Why the Inghams (ASX:ING) share price is racing 10% higher

The Inghams Group Ltd (ASX:ING) share price is racing higher on Friday after the release of its guidance for FY 2021…
The post Why the Inghams (ASX:ING) share price is racing 10% higher appeared first on The Motley Fool Australia. –

The Inghams Group Ltd (ASX: ING) share price is on course to finish the week with a very strong gain.

In early trade, the poultry producer’s shares are up 10% to $3.46.

Why is the Inghams share price racing higher?

Investors have been bidding the Inghams share price higher today following the release of a trading update and its guidance for FY 2021.

According to the release, based on its assessment of consensus estimates, and taking into account its current operating performance, management believes its forecast EBITDA may exceed, and forecast statutory NPAT may materially exceed, the market’s expectations in FY 2021.

This could be bad news for short sellers. The Inghams share price has consistently been among the most shorted list on the ASX this year. At the last count, 8% of its shares were held short.

What is Inghams forecasting?

For the 12 months ending 25 June, Inghams is forecasting statutory EBITDA of $438 million to $448 million and statutory net profit after tax of $80 million to $87 million. This is based on a post AASB16 basis.

On an underlying pre AASB16 basis, the company expects to report EBITDA of $203 million to $213 million and net profit after tax of $96 million to $103 million.

Management advised that this has been driven by the benefits derived from operational efficiencies implemented throughout the year. It also notes that trading conditions have improved since COVID-19 restrictions eased over the last six months.

However, it has warned about the consensus estimates that it is judging its performance against.

It advised: “The Company has formed its view on consensus based on a review of the most recently available analyst research. The Company also notes that analyst estimates available through recognised third-party data providers and systems appear to incorporate forecasts for the Company based on a mixture of both pre and post AASB16 estimates, and therefore may not be reliable indicators of market expectations.”

Learn where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of May 24th 2021

More reading

These are the 10 most shorted shares on the ASX

These are the 10 most shorted shares on the ASX

These are the 10 most shorted shares on the ASX

These are the 10 most shorted shares on the ASX

The post Why the Inghams (ASX:ING) share price is racing 10% higher appeared first on The Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!