Associated British Foods (ABF) AI Stock Analysis

• Market Cap: £14.08B
• Dividend Yield: 3.18%
• Average Volume (3M): 895.69K
• Price to Earnings (P/E): 11.2
• Beta (1Y): 0.89
• Revenue Growth: -0.38%
• EPS Growth: 14.68%
• Country: UK
• Employees: 138,000
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Packaged Foods
• EPS (TTM): 0.84
• Shares Outstanding: 715,863,900
• 10 Day Avg. Volume: 1,075,856
• 30 Day Avg. Volume: 895,692
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: £2,174.43
• Price Target Upside: 9.88% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 9

• Rating: 65 Neutral
• Price Target: 2,091.00p ▲(5.66% Upside)

Associated British Foods' strong financial performance and attractive valuation are offset by bearish technical indicators. The company's robust financial foundation supports its competitive position, but current market momentum suggests caution. The absence of earnings call data and corporate events limits additional insights.

Positive Factors

Strong Financial Performance

ABF's consistent revenue growth and solid profitability margins indicate a robust financial foundation, supporting its competitive position and long-term business sustainability.

Cash Flow Generation

The significant improvement in free cash flow highlights ABF's strong cash generation capabilities, ensuring liquidity and operational flexibility for future investments and growth.

Balance Sheet Health

ABF's low leverage and strong equity base reflect a solid capital structure, reducing financial risk and enhancing stability, which supports long-term strategic initiatives.

Negative Factors

Revenue Growth Challenges

While positive, the modest revenue growth rate suggests potential challenges in rapidly expanding market share, which could impact long-term competitive positioning.

Dependence on Net Income

The reliance on net income for free cash generation could limit financial flexibility, especially if profitability faces pressure, impacting long-term cash flow stability.

Market Momentum Concerns

Bearish momentum in technical indicators may reflect underlying market concerns, potentially affecting investor confidence and the company's ability to raise capital or invest in growth.

Associated British Foods Business Overview & Revenue Model

Company Description

Associated British Foods plc operates as a diversified food, ingredients, and retail company worldwide. It operates through five segments: Grocery, Sugar, Agriculture, Ingredients, and Retail. The Grocery segment manufactures and sells grocery products, including hot beverages, sugar and sweeteners, vegetable oils, balsamic vinegars, bread and baked goods, cereals, ethnic foods, and meat products to retail, wholesale, and foodservice businesses. The Sugar segment is involved in growing, processing, and selling sugar beet and sugar cane to industrial users. The Agriculture segment manufactures and sells animal feeds; and provides other products and services for the agriculture sector. The Ingredients segment manufactures bakers' yeast, bakery ingredients, enzymes, lipids, yeast extracts, and cereal specialties. The Retail segment is involved in buying and merchandising clothing and accessories through the Primark and Penneys retail chains, which offer womenswear, menswear, children's wear, footwear, accessories, homeware, and skincare products. The company was founded in 1935 and is headquartered in London, the United Kingdom. Associated British Foods plc is a subsidiary of Wittington Investments Limited.

How the Company Makes Money

ABF generates revenue through multiple key streams across its diverse sectors. The grocery segment, which includes well-known brands like Twinings and Ovaltine, contributes significantly to the company's earnings through the sale of packaged foods and beverages. The agriculture and sugar sectors generate income through the production and sale of agricultural products and sugar, respectively, capitalizing on both domestic and international markets. ABF's ingredients division supplies food manufacturers and other industries with essential components, which adds another revenue layer. Furthermore, Primark, as a leading fashion retailer, drives a substantial portion of ABF's revenue through its extensive network of stores across Europe and the USA, focusing on affordable fashion. The company's strategic partnerships with suppliers and manufacturers, along with its ability to innovate and adapt to market trends, further enhance its revenue generation capabilities.

Associated British Foods Financial Statement Overview

Summary

Associated British Foods demonstrates strong financial performance with consistent revenue growth, solid profitability margins, and a robust balance sheet characterized by low leverage and strong equity. The cash flow statement indicates healthy liquidity and operational cash generation, despite some reliance on net income.

Income Statement

Associated British Foods has demonstrated strong revenue growth with a notable increase of 1.57% over the last year, reaching £20.07 billion. The company maintains a solid gross profit margin of 24.32% and a healthy net profit margin of 7.25%, indicating effective cost management and profitability. The EBIT margin stands at 9.63%, and the EBITDA margin at 15.61%, showcasing robust operational performance. Overall, the income statement reflects a positive growth trajectory and stable profitability.

Balance Sheet

The balance sheet of Associated British Foods reveals a sturdy financial position with a debt-to-equity ratio of 0.33, suggesting moderate leverage and manageable debt levels. The company achieves a return on equity of 12.99%, which signifies efficient utilization of equity to generate profits. Additionally, the equity ratio is strong at 58.81%, indicating a solid capital structure with a good portion of assets financed by equity. These metrics underline the company's financial stability and low risk exposure.

Cash Flow

The cash flow statement highlights a significant improvement in free cash flow, which surged by 190.91% year-over-year, reaching £1.79 billion. The operating cash flow to net income ratio is 2.00, reflecting strong cash generation relative to net income. However, the free cash flow to net income ratio is 1.23, indicating a slight dependence on net income for free cash generation. Overall, the cash flow metrics suggest healthy liquidity and operational cash generation, despite some reliance on net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	19.85B	20.07B	19.75B	17.00B	13.88B	13.94B
Gross Profit	1.73B	4.88B	4.16B	3.78B	3.13B	3.14B
EBITDA	2.65B	3.13B	2.48B	2.13B	1.80B	1.81B
Net Income	1.31B	1.46B	1.04B	700.00M	478.00M	455.00M
Balance Sheet
Total Assets	18.68B	19.01B	18.84B	19.77B	16.89B	16.67B
Cash, Cash Equivalents and Short-Term Investments	824.00M	1.66B	1.46B	2.13B	2.31B	2.03B
Total Debt	3.60B	3.68B	3.72B	3.89B	3.69B	4.11B
Total Liabilities	7.58B	7.74B	7.65B	8.22B	6.89B	7.23B
Stockholders Equity	10.99B	11.19B	11.09B	11.45B	9.92B	9.36B
Cash Flow
Free Cash Flow	1.38B	1.79B	614.00M	380.00M	742.00M	1.08B
Operating Cash Flow	2.48B	2.87B	1.69B	1.15B	1.37B	1.70B
Investing Cash Flow	-1.15B	-1.33B	-1.06B	-854.00M	-656.00M	-574.00M
Financing Cash Flow	-1.85B	-1.57B	-1.16B	-563.00M	-373.00M	-572.00M

Associated British Foods Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1979.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:ABF, the sentiment is Negative. The current price of 1979 is below the 20-day moving average (MA) of 2115.77, below the 50-day MA of 2177.03, and below the 200-day MA of 2037.73, indicating a bearish trend. The MACD of -67.24 indicates Positive momentum. The RSI at 33.73 is Neutral, neither overbought nor oversold. The STOCH value of 17.10 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:ABF.

Associated British Foods Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PFD	72 Outperform	1.66B	13.47	8.66%	1.46%	1.01%	11.12%
CWK	71 Outperform	2.68B	19.99	13.59%	2.02%	4.77%	18.94%
TATE	67 Neutral	2.21B	35.27	8.99%	3.96%	5.40%	-67.46%
HFG	66 Neutral	586.12M	14.97	12.82%	5.28%	8.58%	-15.81%
ABF	65 Neutral	£14.08B	11.16	11.89%	3.18%	-0.38%	14.68%
BAKK	63 Neutral	1.26B	33.93	9.04%	2.72%	0.59%	-41.66%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%

Associated British Foods Corporate Events

Associated British Foods Reports Mixed Trading Update Amid Strategic Changes

Associated British Foods reported a mixed trading update for the second half of its financial year, highlighting strong performance in the US market for its Primark stores, while facing challenges in Europe due to a weaker consumer environment. The company is undergoing strategic changes, including the closure of its Vivergo bioethanol plant and restructuring of its Spanish sugar business, which are expected to impact its financials. Despite these challenges, the company is optimistic about future benefits from recent actions and continued investments, particularly in expanding its store portfolio and digital initiatives.

The most recent analyst rating on (GB:ABF) stock is a Sell with a £2130.00 price target. To see the full list of analyst forecasts on Associated British Foods stock, see the GB:ABF Stock Forecast page.

Associated British Foods Updates Shareholders on Voting Rights

Associated British Foods plc announced that it has 715,863,867 ordinary shares admitted to trading, each carrying one vote at general meetings. This update, in line with the Financial Conduct Authority’s rules, aids shareholders in determining their notification requirements regarding their interest in the company.

The most recent analyst rating on (GB:ABF) stock is a Sell with a £2130.00 price target. To see the full list of analyst forecasts on Associated British Foods stock, see the GB:ABF Stock Forecast page.

Associated British Foods Completes £500 Million Share Buyback

Associated British Foods plc has completed its £500 million share buyback program, which was announced in November 2024, by repurchasing 94,116 of its ordinary shares from Barclays Capital Securities Limited. This transaction marks the final purchase under the second and final £250 million tranche of the program, indicating a strategic move to enhance shareholder value and optimize the company’s capital structure.

The most recent analyst rating on (GB:ABF) stock is a Sell with a £17.70 price target. To see the full list of analyst forecasts on Associated British Foods stock, see the GB:ABF Stock Forecast page.

Associated British Foods Executes Share Buyback to Enhance Shareholder Value

Associated British Foods announced the repurchase and cancellation of 110,000 of its ordinary shares from Barclays Capital Securities as part of its ongoing share repurchase program. This transaction, conducted on the London Stock Exchange, reflects the company’s strategy to enhance shareholder value and optimize its capital structure, potentially impacting its market positioning and investor relations.

The most recent analyst rating on (GB:ABF) stock is a Sell with a £17.70 price target. To see the full list of analyst forecasts on Associated British Foods stock, see the GB:ABF Stock Forecast page.

Associated British Foods Executes Share Buyback

Associated British Foods plc announced the repurchase and cancellation of 108,004 of its ordinary shares from Barclays Capital Securities Limited as part of its share repurchase programme. This transaction, executed on the London Stock Exchange, reflects the company’s ongoing strategy to manage its capital structure, potentially enhancing shareholder value and indicating confidence in its financial health.

The most recent analyst rating on (GB:ABF) stock is a Sell with a £17.70 price target. To see the full list of analyst forecasts on Associated British Foods stock, see the GB:ABF Stock Forecast page.

Associated British Foods Executes Share Buyback

Associated British Foods plc announced the repurchase and cancellation of 98,789 of its ordinary shares as part of its share repurchase program. This transaction, conducted with Barclays Capital Securities Limited, is part of the company’s ongoing efforts to manage its capital structure and potentially enhance shareholder value.

The most recent analyst rating on (GB:ABF) stock is a Hold with a £2150.00 price target. To see the full list of analyst forecasts on Associated British Foods stock, see the GB:ABF Stock Forecast page.