Shares in Associated British Foods (LON:ABF) have been subdued today, with investor attention turning to the group’s pre-closing update next week. Analysts expect the group’s Primark business to post a small rise in sales for the last quarter of the company’s financial year.
As of 13:49 BST, AB Foods’ share price had lost 0.27 percent to 3,282.00p, largely in line with losses in the broader UK market, with the benchmark FTSE 100 index currently standing 0.40 percent lower at 7,367.38 points. The group’s shares have added about 3.5 percent to their value over the past year, and are up by just under a fifth in the year-to-date.
AB Foods is scheduled to post a pre-closing trading update on Monday and Proactive Investors reports that JPMorgan expects Primark to deliver fourth quarter like-for-like sales growth of two percent, which would take the chain’s full-year like-for-like increase to one percent.
“We expect management to reiterate its full year expectation for ‘good growth’ in group adjusted operating profit & EPS and forecast +20% & +17% yoy, respectively,” the analysts pointed out, adding that they also expect AB Foods’ management to highlight some upside risk to Primark profitability if current euro strength is maintained.
The comments come after Credit Suisse recently lifted its valuation on the blue-chip group, pointing to the potential for the introduction of a ‘click and collect’ model, as well as the likely boost to earnings from currency tailwinds alongside an ‘attractive’ entry point in valuation terms.
The 17 analysts offering 12-month price targets for AB Foods for the Financial Times have a median target of 3,300.00p on the shares, with a high estimate of 3,700.00p and a low estimate of 2,200.00p. As of September 1, the consensus forecast amongst 21 polled investment analysts covering the Primark owner has it that the company will outperform the market.