BofA Securities cut its target price for WH Group to HK$8.50 and revised down its earnings forecasts for 2026 and 2027. It said the dividend is expected to support a yield of more than 5%.
BofA Securities, a major US bank, cut its target price for WH Group from HK$9.60 to HK$8.50 and maintained its Buy rating. The main factors were weak US hog and pork prices and a downward revision to the earnings outlook recently published by its subsidiary Smithfield. Earnings per share forecasts for 2026 and 2027 were also cut by 8% and 11%, respectively. As a result, third-quarter earnings are expected to fall below the previous outlook.
By region, profit from the China business is expected to decline, while lower profits are also forecast for the US and European businesses. Operating profit from the China business in renminbi terms is expected to decline year on year, with an impact also expected in US dollar terms. A high base for packaged meat and losses from hog and poultry farming were cited as pressure factors.
Regarding dividends, BofA forecast WH Group's regular dividend for 2026 at HK$0.51, down from HK$0.61 in 2025, while the payout ratio is expected to be approximately 60% and the normalised dividend yield is expected to exceed 5%. It also indicated potential for an upside surprise, citing the stability of the funds available for dividends.