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Associated British Foods PLC ABF

Morningstar Rating
GBX 2,378.00 −30.00 (1.25%)
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Company Report

Associated British Foods Optimistic on Profit Recovery as Primark Appeals to Cash-Strapped Consumers

Although we think that Associated British Foods', or ABF's, mass-apparel retail division– Primark–should deliver consistent growth through its expansion over the short term, supported by a reliable performance from the remaining largely commodified food divisions, we believe that the company’s potential will be limited over the long term by intense competition and a lack of differentiation, leading to our no-moat rating.

Price vs Fair Value

ABF is trading within a range we consider fairly valued.
Price
GBX 2,408.00
Fair Value
GBX 8,548.00
Uncertainty
Medium
1-Star Price
GBX 8,537.20
5-Star Price
GBX 6,179.00
Economic Moat
Xhcnk
Capital Allocation
Dpcfrbll

Bulls Say, Bears Say

Bulls

Primark is in the expansion phase and new store additions will likely drive earnings growth for years to come.

Bears

The lack of an online retail business represents a potential hindrance to long-term growth, as Primark stands to miss out on about 50% of consumers’ budget allocation to the channel by 2029.

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News

Trading Information

Previous Close Price
GBX 2,408.00
Day Range
GBX 2,370.002,389.00
52-Week Range
GBX 1,804.502,536.00
Bid/Ask
GBX 2,377.00 / GBX 2,378.00
Market Cap
GBX 1.79 Tril
Volume/Avg
139,656 / 1.1 Mil

Key Statistics

Price/Earnings (Normalized)
18.16
Price/Sales
0.95
Dividend Yield (Trailing)
1.95%
Dividend Yield (Forward)
1.95%
Total Yield
4.66%

Company Profile

Associated British Foods is a diversified international retail, food, and ingredients group with 130,000 employees and operations in 50 countries across Europe, southern Africa, the Americas, Asia, and Australia. The group sells branded grocery products, grows and processes sugar, supplies farmers with crop input and animal feed, and runs the popular Primark clothing retail chain. It also supplies ingredients like baker's yeast, enzymes, lipids, and cereal specialities. Some 40% of sales are in the U.K., and Primark generates more than half of the firm's operating profit.
Sector
Consumer Defensive
Industry
Packaged Foods
Stock Style Box
Large Core
Total Number of Employees
133,000

Competitors

Valuation

Metric
ABF
GPS
ITX
Price/Earnings (Normalized)
18.1616.1825.22
Price/Book Value
1.683.317.28
Price/Sales
0.950.583.78
Price/Cash Flow
10.548.4315.57
Price/Earnings
ABF
GPS
ITX

Financial Strength

Metric
ABF
GPS
ITX
Quick Ratio
0.850.711.45
Current Ratio
1.831.421.79
Interest Coverage
5.436.2224.95
Quick Ratio
ABF
GPS
ITX

Profitability

Metric
ABF
GPS
ITX
Return on Assets (Normalized)
6.06%4.85%17.22%
Return on Equity (Normalized)
10.36%22.84%32.33%
Return on Invested Capital (Normalized)
7.78%6.69%23.96%
Return on Assets
ABF
GPS
ITX
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