Glanbia Shares Drop on Whey Supply Overshoot Warning
Glanbia shares fell nearly 12 percent after Bank of America warned that rising whey supply will erode current pricing power, threatening the company's adjusted EPS growth targets.
Glanbia shares declined by 12 percent over two trading sessions following a negative assessment from Bank of America. The analyst note highlighted that while high whey prices currently benefit the company’s superior supply chain, these levels are unsustainable. The firm expects industry-wide capital expenditure to drive a 20 percent increase in production capacity during the 2026-2027 financial year, creating an oversupply risk.
The bank’s analysts rated the stock as an underperformer, citing a potential collision between increased supply and weakening demand. They warned that the current 'proteinmaxxing' trend may reverse due to marketing fatigue and a consumer shift toward alternative ingredients such as fiber, creatine, or peptides. This demand-side risk poses a direct threat to the profit expectations of Glanbia’s dairy nutrition division.
Current Demand Driven by GLP-1s
Glanbia has recently benefited from the global rise in weight-loss drug usage, which requires higher protein intake to preserve muscle mass. Chief Executive Hugh McGuire confirmed that GLP-1s are a significant tailwind for the business. This demand driver contributed to a 7 percent revenue jump in the first six months of the year, including a 25 percent spike in sales for its premium Optimum Nutrition protein powder.
Financial Performance and Forecasts
The Dublin-listed group recently lifted its annual earnings forecast after delivering better-than-expected half-year results. In the health and nutrition sector, revenues rose nearly 18 percent year-on-year to $368.5 million. Meanwhile, the dairy nutrition division saw income increase by 3.9 percent to $793.7 million. Based on this strong performance, Glanbia now projects adjusted earnings per share growth of 17 to 20 percent for 2026, a significant upgrade from its previous forecast of 7 to 11 percent.
Despite the upgraded internal guidance, the market reaction reflects skepticism about the durability of these gains. The 7.5 percent drop in Dublin on Thursday, followed by a further 5.4 percent slide on Friday, illustrates investor concern that the current pricing environment is temporary. Bank of America’s warning suggests that structural supply changes will outpace demand growth, potentially compressing margins in the coming year.
