Citi Cuts WH Group (00288) Price Target to HK$10.1, Lowers Earnings Projections

Stock News14:12

Citi released a research report noting it has cut its earnings forecasts for WH Group (00288) for 2026-2028 by 6-11%, reflecting lower estimates for operations in the US and China. The price target has been slashed from HK$12.3 to HK$10.1. Assuming dividends remain unchanged, the firm maintains a "Buy" rating based on an attractive yield.

WH Group's subsidiary, Smithfield Foods, delivered second-quarter operational performance that aligned with Citi's expectations for the company's US and Mexico segment. However, Smithfield's downward revision of its 2026 adjusted operating profit guidance by 7% fell short of expectations. Citi believes Smithfield's guidance reduction stems from a downtrend in hog futures prices. This decline is likely driven by increased industry supply and inflation-weakened demand. Nonetheless, as hog prices typically weaken seasonally in the fourth quarter, it is still too early to determine whether the US hog price cycle has reversed.

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