Morgan Stanley: Maintains "Overweight" rating on WH GROUP (00288) and lowers target price to HKD 10.6.
The bank is optimistic about WH Group's leadership position in the global pork industry, coupled with an attractive forecasted price-to-earnings ratio and EV/EBITDA valuation for 2026.
Morgan Stanley released a research report stating that it has updated the risk-reward estimates for WH GROUP (00288) and lowered the earnings forecast for 2026 by about 7%. This adjustment mainly reflects the downward revision of guidance for North America in the second half of the year and the weak conditions in the European pork market, partially offset by a quarterly improvement in margins for Chinese packaged meats due to normalized channel investments. The bank also reduced the earnings forecasts for 2027 and 2028 by 7% to 9% to account for the lower base in 2026. The target price has been lowered accordingly by 7%, from HKD 11.4 to HKD 10.6. They remain optimistic about WH GROUP's leading position in vertical integration within the global pork industry, and view the projected price-to-earnings ratio and EV/EBITDA valuation for 2026 as attractive, maintaining an "overweight" rating.
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