Goldman Sachs has lowered its rating on Associated British Foods (LON:ABF), pointing to recent exchange rate fluctuations, Proactive Investors reports. The move came after last month, the Primark owner unveiled a rise in interim revenue and reaffirmed its full-year outlook, while also posting a drop in half-year profit, pressured by weak performance at its Sugar business.
AB Foods’ share price feel deep into the red in the previous session, giving up 1.45 percent to 2,710.00p, underperforming the broader UK market, with the benchmark FTSE 100 index shedding 71.70 points to close 0.92 percent lower at 7,716.74. The group’s shares have lost more than eight percent of their value over the past year, as compared with about a 2.7-percent rise in the Footsie.
Goldman Sachs trims stance on AB Foods
Goldman Sachs lowered its rating on AB Foods to ‘neutral’ yesterday, further trimming its price target on the shares from 3,100p to 3,000p. Proactive Investors reports that factoring in the strength of the dollar against sterling since the end of March, the broker cut £26 million off its earnings before interest and tax (EBIT) forecast, which now stands at £930 million, or up 13 percent year-on-year. The earnings per share forecast for the Primark owner meanwhile has been trimmed by two percent to 146.3p, marking a 10-percent rise year-on-year.
Other analysts on Primark owner
The 16 analysts offering 12-month price targets for AB Foods for the Financial Times have a median target of 3,175.00p on the shares, with a high estimate of 3,600.00p and a low estimate of 2,600.00p. As of May 23, the consensus forecast amongst 21 polled investment analysts covering the Primark owner has it that the company will outperform the market.