AB Foods share price: Jefferies flags upbeat interim results

on Apr 18, 2017
Updated: Oct 21, 2019
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Jefferies expects strong interim results at Associated British Foods (LON:ABF) tomorrow, the analysts have said. The comments came as the broker lifted its rating and price target on the Primark owner last week.

AB Foods’ share price has been steady in today’s session, having added 0.37 percent to 2,719.00p as of 13:05 BST, outperforming the broader market selloff, with the benchmark FTSE 100 index having tumbled 1.74 percent to 7,200.19 points, after Prime Minister Theresa May called for a snap election in June. The group’s shares have lost more than 18 percent of their value over the past year, and are down by a little over one percent in the year-to-date.

AB Foods is scheduled to update investors on its interim performance tomorrow and Jefferies expects the statement to confirm strong results with sales up 18 percent and earnings per share up 28 percent thanks to currency effects and a sugar rebound. The comments came as the analysts upgraded their rating on the company to ‘buy’ on Friday and raised their price target on the shares from 2,450p to 3,100p last week.
While expecting minimal Primark progress in the first half, Jefferies felt the key focus will be on Primark’s future margin trajectory.
“Evidence of price recovery is starting to come through in Germany, and we expect this to extend to the UK by Autumn/Winter 2017,” the broker pointed out, as quoted by Sharecast. “Our proprietary pricing shows remarkable price discipline at Primark UK despite the pain from six-month sourcing lead times.”
The 18 analysts offering 12-month price targets for AB Foods for the Financial Times have a median target of 3,025.00p on the shares, with a high estimate of 3,550.00p and a low estimate of 2,200.00p. As of April 14, the consensus forecast amongst 22 polled investment analysts covering the Primark owner has it that the company will outperform the market.
As of 13:24 BST, Tuesday, 18 April, Associated British Foods plc share price is 2,716.00p.

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