Associated British Foods Share Discussion Threads

[philanderer] 06/9/2024 16:55

Almost hit Deutsche's target already


Primark owner ABF hit again as Deutsche cuts forecasts.

Primark owner Associated British Foods PLC (LSE:ABF) faced a blow on Friday morning as Deutsche Bank wound down expectations after the firm's own warning on Thursday.

ABF’s update had shown Primark sales down on a like-for-like basis over the first half of the year, while profits from its sugar business were lower than expected.

“Investors were already cautious on the weak Primark [...] performance but this remains the main ongoing cause for investor uncertainty on the stock,” Deutsche said in a note.

A ‘sell’ rating was reiterated as a result, with Deutsche also winding down pre-tax earnings forecasts for the coming three years.

The bank’s share price target for ABF was cut too, from 2,190p to 2,130p.

“We need to see more evidence of a recovery in Primark like-for-like, otherwise we believe they will need to invest more into the brand to deliver a sales uplift,” Deutsche added.



proactiveinvestors.co.uk

[philanderer] 06/9/2024 16:15

A stunning -11.3% drop for ABF for the week. Who'd have thought it.

[liam1om] 06/9/2024 14:50

Fingers crossed, thats the rumour today anyway. Dubai starting to look tempting!

[tlobs2] 06/9/2024 14:20

liam1om I expect them to make a lot of changes, but I don't believe they would be able to make it retrospective. It would be the end of Labour after just four months in charge.

They are already getting a shafting from Labour supporters after stealing the pensioners heating supplement to fill their imaginary made up £22B black hole. ;-)

[philanderer] 06/9/2024 13:53

Support gone, next chart support looks to be last october's 1950p

[suetballs] 06/9/2024 13:51

According to my IFA lots of his clients are taking capital gains now - regardless of their long term plans. There are many more buy to let properties coming on to the market too.
Certainly not a time to be exposing more capital to the markets.
The North Sea looks doomed and increased workers' rights are problematic. And what about windfall taxes etc....
Suet - sigh.

[liam1om] 06/9/2024 13:26

I think investors will flood out of the market if the reported 45% capital gains tax is true. Also talk it will be retrospective!

[suetballs] 06/9/2024 13:02

I think the over done gloom and doom at the hands of Reeves and Starmer has rocked confidence generally.
We will all know our fate on budget day on 30th October but until then uncertainty will prevail.
I just hope investors and businesses aren't bashed up too much.
Suet

[philanderer] 06/9/2024 12:28

Afternoon EI. I don't think the market liked anything at all about that update.

[essentialinvestor] 06/9/2024 12:18

I can't see FY EPS much below 1.70 and that's being pretty cautious.

So a rating of around 13 X, hardly expensive.


What the market may not have liked is a comment on Primark losing some UK share.

[essentialinvestor] 06/9/2024 11:40

Consensus, before yesterday was 1.90 on FY EPS.

I would guess there may be downward revisions..

[philanderer] 06/9/2024 09:31

Goldman Sachs cuts Associated British Foods price target to 2,580 (2,920) pence - 'neutral'


Jefferies cuts Associated British Foods price target to 2,400 (2,500) pence - 'hold'

[dope007] 06/9/2024 09:23

There is little investment in UK funds. That's the real problem, money is still being yanked from funds who then have to sell to cover the redemptions

[suetballs] 06/9/2024 09:21

Why are our markets so short term.
Ok we've had a poor summer but FY24 profit for Primark is unchanged. Surely a round of applause for that.
FY25 outlook appears ok to me apart from sugar.
And yet the share price gets hammered.
But what about Shein you say.
Suet - thinking long term unless death intervenes!

[philanderer] 06/9/2024 08:54

Bang on that 2250p chart support now.

If this goes 1950p is next.

[tlobs2] 06/9/2024 05:58

Share buyback (from yesterdays announcement)

In August, we completed our second £500m share buyback programme. Given the expected strong cash generation this year, we intend to extend this programme by an additional £100m, which we expect to complete around the time of our annual results announcement on 5 November 2024. We will provide a detailed update on our capital position at that time.

[philanderer] 05/9/2024 17:34

Market report


Leading the blue-chip fallers, AB Foods fell 8.5% after warning falling sugar prices would see profits in the division fall below expectations.

The firm also also bemoaned the impact of bad weather, as it reported a drop in like-for-like sales in the fourth quarter for its discount retailer, Primark.

‘Primark has had a good run but it is not immune to the vagaries of the British weather and owner Associated British Food’s year-end trading update reveals the retail chain has been hit by the soggy summer,’ explained AJ Bell analyst Russ Mould.

The bad weather resulted in lower footfall and particularly impacted sales of seasonal lines in womenswear and footwear, AB Foods explained. But while volumes were soft, the average selling price increased as a result of mix.

[tlobs2] 05/9/2024 14:50

Just think of all the additional shares they can collect at a lower price with the buy back ;-)

[philanderer] 05/9/2024 13:56

tl, luck with those. Seems like relentless selling today.

Hopefully chart support at february's 2250p

[tlobs2] 05/9/2024 11:56

I've just bought a few more. Couldn't resist.

There are more things positive in the trading update than there are negatives ones IMHO

[philanderer] 05/9/2024 09:52

Barclays cuts Associated British Foods price target to 2,600 (2,700) pence - 'equal weight'

[philanderer] 05/9/2024 09:39

Wet weather and lower sugar prices then.

[philanderer] 05/9/2024 09:25

That's disappointing. Deutsch Bank's 'sell' note a couple of weeks ago not looking as stupid as I thought at the time. Broken down through the 200 ma.

Still holding though.

[essentialinvestor] 05/9/2024 08:51

Primark potential in the US has been mentioned for a decade.

The fact is, ABF has this far been unable to replicate the success of Primark UK in other markets - the ROI being the exception, where Primark began trading as Penny's.